Summary Judgment Reversed; Issue for Trial on Ambiguous Term in Contract

On November 17, 2015, the First Department issued a decision in Impala Partners v. Borom, 2015 NY Slip Op. 08352, holding that a contract was ambiguous and thus summary judgment should not have been granted.

In Impala Partners, the trial court granted the plaintiffs' partial summary judgment dismissing the defendant's counterclaim based on an agreement between the parties. The First Department reversed, explaining;

It is well settled that the question of whether a writing is ambiguous is a question of law that is to be resolved by the court. Extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face. Only where a contract term is ambiguous may parol evidence be considered to clarify the disputed portions of the parties' agreement. Given the extent of the dispute over the meaning of the term "that certain transaction with Enron ( Rawhide ')," and the fact that resolving it necessarily involves credibility determinations of the parties' testimony and the assessment of parol evidence, we find that the term is ambiguous and issues of fact exist that preclude the grant of summary judgment.

(Internal quotations and citations omitted).