Hunt Ltd. v. Lifschultz Fast Freight, Inc.

• Decision Date: 20 November 1989
• Docket Number: No. 167,D,167
• Citation: 889 F.2d 1274
• Parties: HUNT LTD., Plaintiff-Appellee, v. LIFSCHULTZ FAST FREIGHT, INC., Defendant-Appellant. ocket 89-7466.
• Court: U.S. Court of Appeals — Second Circuit

Page 1274

889 F.2d 1274

HUNT LTD., Plaintiff-Appellee, v. LIFSCHULTZ FAST FREIGHT, INC., Defendant-Appellant.

No. 167, Docket 89-7466.

United States Court of Appeals, Second Circuit.

Argued Sept. 19, 1989.

Decided Nov. 20, 1989.

Andrew J. Luskin, Great Neck, N.Y. (Paul H. Pincus, Peirez, Ackerman & Levine, Great Neck, N.Y., on the brief), for plaintiff-appellee.

Mitchell R. Berger, Washington, D.C. (Roger S. Ballentine, Patton, Boggs & Blow, Washington, D.C., on the brief), for defendant-appellant.

Before VAN GRAAFEILAND, MESKILL, and KEARSE, Circuit Judges.

KEARSE, Circuit Judge:

Defendant Lifschultz Fast Freight, Inc. ("Lifschultz"), appeals from a final judgment entered in the United States District Court for the Southern District of New York following a bench trial before John M. Walker, Jr., Judge, ordering it to pay $22,911.65, plus interest, to plaintiff Hunt Ltd. ("Hunt") as damages for breach of a contract that required Lifschultz to pay Hunt a fee for employee placement services. On appeal, Lifschultz contends, inter alia, that the district court erroneously found the contract's language unambiguous and failed to consider proffered extrinsic evidence of trade usage as to its meaning. Though we reject these contentions, we conclude, for the reasons below, that the judgment should be vacated and the matter remanded for further findings.

I. BACKGROUND

Hunt is a personnel placement firm that searches for, refers, and places employees with various businesses. Lifschultz is a common carrier of goods for hire, conducting business throughout the United States. The events leading to the present controversy are undisputed.

In or about January 1987, Lifschultz engaged Hunt to search for candidates to fill sales representative positions within the company. The fee provision in p 2 of the parties' negotiated agreement ("Agreement") stated, in pertinent part, as follows:

Hunt, Ltd. agrees to diligently search for qualified sales representatives for Lifschultz Fast Freight and will earn a service fee on any representative so placed on the basis of two percent (2%) of the monthly booking of said sales representative for each month up to, but not exceeding, a period of twelve months.

Lifschultz paid Hunt a $1,000 advance to offset initial search expenses.

Following a search, Hunt referred Robert Opel to Lifschultz, and he was hired in March 1987 as a sales representative responsible for Lifschultz's Manhattan territory. Opel remained in that position until August 31, 1987.

During the period in which Opel was employed by Lifschultz, Lifschultz's revenues for its Manhattan territory totaled $1,195,561.18. Of that amount, $102,375.67 represented business from new customers found by Opel. For his services during the period, Lifschultz paid Opel a total of $11,000 in salary.

Hunt sought fees from Lifschultz, for its placement of Opel, in the amount of $55,126.17, representing two percent of projected revenues in Lifschultz's Manhattan territory for the one-year period following Opel's hiring by Lifschultz, net of the $1,000 advance already paid by Lifschultz. Lifschultz refused to pay, contending that Hunt was entitled to no more than two percent of the business from new customers found by Opel, less the $1,000 advance already paid, or $1,047.51.

Hunt commenced the present action against Lifschultz in New York state court. The action was removed to the district court and, eventually, the amount of damages demanded by Hunt was reduced to Prior to trial, the parties stipulated, inter alia, that "Opel was employed by defendant from March 31, 1987 through August 31, 1987 as a sales representative responsible for its Manhattan territory," and that the only issue to be tried was

$22,911.65, representing two percent of the total revenues of the Manhattan territory during the period of Opel's employment, less the $1,000 advance.

[w]hether the term "booking" in paragraph 2 of the contract ... means the revenues of defendant attributable to Robert Opel during his employment by defendant, irrespective of whether defendant's customers who generated such revenues had previously done business with defendant, or means the revenues of defendant solely attributable to new customers produced by Mr. Opel.

The case was submitted to the district court for decision on the basis of the written submissions. Prior to deciding the matter, the court asked the parties to submit additional evidence as to the meaning of the term "booking." In response, the parties submitted affidavits from industry executives and consultants. Those submitted by Lifschultz stated that the term "booking" meant only revenues from new accounts produced by the salesman. Those submitted by Hunt stated that "booking" meant not just revenues from new accounts but all revenues generated in the salesman's territory.

In a Memorandum and Order dated March 9, 1989, the court ruled in favor of Hunt. The court found that "[d]uring the term of his employment, Opel was the sole sales representative for Lifs[c]hultz's Manhattan territory." It also found, having consulted dictionary and industry-treatise definitions, that the term "booking" was broader than the interpretation urged by Lifschultz. Those reference works described bookings, in pertinent part, simply as reservations for transportation, and as the recording of arrangements for the movement of goods. The court found that

the term "booking", as used in the contract, is explicit and unambiguous. In its context, the Court concludes, "booking" refers to the total revenues of defendant attributable to Opel during his employment by the defendant, whether those revenues resulted from "new" customers, new bookings, or "old" customers who entered into new contracts.

The court concluded that Hunt was entitled to receive two percent of all of Lifschultz's revenues from its Manhattan territory during the period of Opel's employment.

The court rejected Lifschultz's contention that narrow trade usage of the term "booking" precluded Hunt's recovery of the higher amount, ruling that "[a]s there is no ambiguity readily apparent within the contract, custom and usage [are] inappropriate as extrinsic evidence," and finding that even if such evidence were admissible, Lifschultz had not demonstrated that "its narrow definition of 'bookings' has been universally adopted." The court also rejected Lifschultz's contention that the language of the Agreement should be construed against Hunt as its draftsman, since it found that only one reasonable interpretation of the language at issue was possible.

Judgment was entered against Lifschultz in the amount of $22,911.65 plus interest, for a total of $27,012.25. This appeal followed.

II. DISCUSSION

On appeal, Lifschultz contends principally that the district court erred in determining that the Agreement's language was unambiguous, in failing to consider the extrinsic evidence of trade usage proffered by Lifschultz, and in failing to find the Agreement unenforceable for lack of a meeting of the minds as to the meaning of the term "booking." In addition, Lifschultz contends that the court in effect granted summary judgment notwithstanding the existence of issues of fact. While we reject these contentions, we are not persuaded that the record justified the trial court's attribution of all of Lifschultz's Manhattan revenues to Opel. Accordingly, we vacate the judgment and remand for further consideration of the extent to which bookings for Lifschultz's Manhattan

customers were bookings attributable to Opel.

A. The Procedural Argument

Lifschultz criticizes the district court's decision as to the meaning of the term "booking" as "in essence, a summary judgment type of disposition," that "should have [been] withheld ... until an appropriate record was assembled." We disagree with both the premise and the conclusion.

First, the record does not indicate that the court decided the present case as a matter of law. Though its ruling that the Agreement's use of the term "booking" was not ambiguous was a legal conclusion appropriate for summary judgment, its rulings as to Opel's role, the revenues of Lifschultz in Manhattan, and the revenues attributable to Opel were plainly findings of fact.

Second, the court did not err in deciding the meaning of the term "booking" without requesting more evidence. The court's statement that Hunt and Lifschultz had "agreed to try this case upon the submitted papers" was justified by the parties' express stipulation in the pretrial order that, with one exception not pertinent here, "[t]he parties agree[d] that the trial of this action should be based on this order and upon the pleadings as amended ...." We see no indication in the record that either party suggested to the district court that any witnesses or other documentary evidence was necessary in order for the court to decide the case.

While Lifschultz correctly states that the court need not accept the parties' view that the case is ripe for decision, and while, as discussed in Part II.C. below, there was a material gap in the record and findings, we conclude that the court did not err in concluding that no further evidence was required for a decision as to the meaning of the term "booking."

B. The Meaning of "[B]ooking"

As a general matter, the objective of contract interpretation is to give effect to the expressed intentions of the parties. See, 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, 909 (1973); Morlee Sales Corp. v. Manufacturers Trust Co., 9 N.Y.2d 16, 19, 210 N.Y.S.2d 516, 518, 172 N.E.2d 280, 282 (1961); 4 S. Williston, Williston on Contracts Sec. 600, at 280 (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." Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019...