Zim v. Western Pub. Co., 75-3776

• Decision Date: 02 June 1978
• Docket Number: No. 75-3776,75-3776
• Citation: 573 F.2d 1318
• Parties: 4 Media L. Rep. 1467 Herbert S. ZIM, Plaintiff-Appellant, v. WESTERN PUBLISHING COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1318

573 F.2d 1318

4 Media L. Rep. 1467

Herbert S. ZIM, Plaintiff-Appellant, v. WESTERN PUBLISHING COMPANY, Defendant-Appellee.

No. 75-3776.

United States Court of Appeals Fifth Circuit.

June 2, 1978.

John C. Malloy, Robert J. Van Der Wall, Miami, Fla., for plaintiff-appellant.

Garth A. Webster, Miami, Fla., David E. Beckwith, Robert A. DuPuy, Milwaukee, Wis., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before GOLDBERG, AINSWORTH, and FAY, Circuit Judges.

GOLDBERG, Circuit Judge:

I

In the beginning, Zim ¹ created the concept of the Golden Guides. ² For the earth was dark and ignorance filled the void. And Zim said, let there be enlightenment and there was enlightenment. In the Golden Guides, Zim created the heavens (STARS) (SKY OBSERVER'S GUIDE) and the earth. (MINERALS) (ROCKS and MINERALS) (GEOLOGY). ³

And together with his publisher, Western, he brought forth in the Golden Guides knowledge of all manner of living things that spring from the earth, grass, herbs yielding seed, fruit-trees yielding fruits after their kind, (PLANT KINGDOM) (NON-FLOWERED PLANTS) (FLOWERS) (ORCHIDS) (TREES), and Zim saw that it was good. And they brought forth in the Golden Guides knowledge of all the living moving creatures that dwell in the waters, (FISHES) (MARINE MOLLUSKS) (POND LIFE), and fowl that may fly above the earth. (BIRDS) (BIRDS OF NORTH AMERICA) (GAMEBIRDS). And Zim saw that it was good. And they brought forth knowledge in the Golden Guides of the creatures that dwell on dry land, cattle, and creeping things, (INSECTS) (INSECT PESTS) (SPIDERS), and beasts of the earth after their kind. (ANIMAL KINGDOM). And Zim saw that it was very good. ⁴

II

Then there rose up in Western a new Vice-President who knew not Zim. And there was strife and discord, anger and frustration, between them for the Golden Guides were not being published or revised in their appointed seasons. And it came to pass that Zim and Western covenanted a new covenant, calling it a Settlement Agreement. But there was no peace in the land. Verily, they came with their counselors of law into the district court for judgment and sued there upon their covenants.

And they put upon the district judge hard tasks. And the district judge listened to long testimony and received hundreds of exhibits. So Zim did cry unto the district judge that he might remember the promises of the Settlement Agreement. And the district judge heard Zim's cry, but gave judgment for Western. Yea, the district judge gave judgment to Western on a counterclaim as well. Therefore, Zim went up out of the court of the district judge.

III

And Zim spake unto the Court of Appeals saying, make a sacrifice of the judgment below. And the judges, three in number, convened in orderly fashion to recount the story of the covenants and to discuss and answer the four questions which Zim brought before them. ⁵

In the first count of his complaint, Zim sought an accounting for royalties due him under the 1970 Settlement Agreement and other agreements. During the course of the trial, most of the issues pertaining to this count were settled when the parties agreed to share the cost of an audit of royalties. The scope of the audit, however, depends in part on the interpretation of certain provisions of the Settlement Agreement. Zim wished to offer parol evidence relevant to these provisions, but was foreclosed from doing so by the district court's ruling that the testimony was inadmissible under the Wisconsin parol evidence rule. Zim challenges this ruling on appeal. The second question before us arises out of Zim's allegation that Western breached the Settlement Agreement by publishing revised versions of two of the Golden Guides, STARS and SKY OBSERVER'S GUIDE, without obtaining his prior approval. The district judge rejected Zim's contention, finding that Western had submitted all proposed changes to Zim, but that Zim had unreasonably withheld his approval. ⁶ Zim's third contention on appeal is that the district judge failed to make appropriate findings relevant to Zim's third count, a tort claim for the unauthorized use of Zim's name in the revised publications. Finally, Zim attacks the district court's judgment in favor of Western on its counterclaim for unjust enrichment.

IV

A. Parol Evidence

And the parties came before the district judge for an accounting of the royalties of Zim. Under Sections 3 and 4 of the 1970 Settlement Agreement, Zim was entitled to payments of royalties and bonuses for books in the "Golden Guide Series." ⁷ Subsection 1.1 of the 1970 contract defines "Golden Guides":

Subsection 1.1 "Golden Guides," or "Guides," as used herein means: All books published or to be published or distributed by Western in the Golden Guide series (including Golden Nature Guides, Golden Handbooks, Golden Science Guides, Golden Regional Guides and Golden Field Guides) or any subseries thereof, regardless of size, binding, format or content, including any publication of similar concept and/or purpose, under the same or a different name.

The parties agree that Zim is to earn royalties and bonuses only on those books "published or to be published or distributed by Western. . . ." They disagree sharply, however, on the correct construction of "Western." Zim offered parol evidence, the testimony of the attorney who represented him during the contract negotiations, to support his view that "Western" means not only Western Publishing Co., the defendant here, but its affiliates and subsidiaries as well. The district judge excluded the testimony on the grounds that "Western" was unambiguous as a matter of law in view of the first recital in the contract. There the parties to the contract were stated to be Zim and "Western Publishing Co., Inc. (a Wisconsin Corporation), its successors and assigns, herein referred to as 'Western' . . ." In the district court's view, the contract provided its own definition of "Western" and that definition was not itself subject to ambiguity, i. e., Western Publishing Co., Inc. (a Wisconsin Corporation), its successors and assigns, meant that jural entity and none other. Zim contends that this ruling denies him his "day in court" and is inconsistent with the Wisconsin parol evidence rule. ⁸

The Supreme Court of Wisconsin has repeatedly formulated and reformulated the parol evidence rule. See, e. g., F. D. I. C. v. First Mortgage Investors, 76 Wis.2d 151, 250 N.W.2d 362 (1977); Patti v. Western Machine Co., 72 Wis.2d 348, 241 N.W.2d 158 (1976); Marshall & Isley Bank v. Milwaukee Gear Co., 62 Wis.2d 768, 216 N.W.2d 1 (1974); Conrad Milwaukee v. Wasilewski, 30 Wis.2d 481, 141 N.W.2d 240 (1966); Georgiades v. Glickman, 272 Wis. 257, 75 N.W.2d 573 (1956). Notwithstanding all the effort in this area, confident application of the rule to a particular case remains elusive. It is, therefore, with some trepidation that we embark upon this determination.

The law in Wisconsin appears to be that parol evidence is not admissible to contradict or vary the terms of an agreement, but may be considered in interpreting an ambiguous term. See, e. g., F. D. I. C. v. First Mortgage Investors, supra, 250 N.W.2d at 365, Marshall & Isley Bank v. Milwaukee Gear Co., supra, 216 N.W.2d at 5. ⁹ In Patti, supra, the court set out an approach to parol evidence problems which is instructive.

The ultimate aim of all contract interpretation is to ascertain the intent of the parties. If this intent can be determined with reasonable certainty from the face of the contract itself, there is no need to resort to extrinsic evidence. If, however, the language of the contract is ambiguous, then the court is not restricted to the face of the instrument in ascertaining intent, but may consider extrinsic evidence. Words or phrases in a contract are ambiguous when they are reasonably susceptible of more than one meaning.

241 N.W.2d at 160.

In another attempt to render unambiguous the meaning of "ambiguous", the Wisconsin Supreme Court has said,

A word or term in a contract to be ambiguous must have some stretch in it some capacity to connote more than one meaning before parol evidence is admissible.

Conrad Milwaukee Corp. v. Wasilewski, supra, 141 N.W.2d at 244. ¹⁰ Moreover, although Wisconsin law recognizes that parol testimony is admissible to clarify a "latent ambiguity," even here the "parol testimony is admitted to resolve an existing ambiguity, not to create one." Marshall & Isley Bank v. Milwaukee Gear Co., supra, 216 N.W.2d at 6.

In the case at bar, the parties made an effort in the written instrument to define the term whose meaning they now contest. They defined "Golden Guides" by reference to another term, "Western," the meaning of which the agreement also provides explicitly. "Western," the recitals tell us, is to stand for "Western Publishing Co., Inc., (A Wisconsin Corporation) its successors and assigns." Western Publishing Co., Inc. (a Wisconsin Corporation), is a definite entity, created by the law and legally distinct from separately incorporated affiliates or subsidiaries. Indeed, when the parties intended to make reference to corporate entities related to, but legally distinct from, Western Publishing Co., Inc. they were capable of specifying this meaning with precision. Subsection 1.2 provides:

"Individual Contract," as used herein means: A contract between Western (including Western's predecessors in interest ) and Zim . . . .

Emphasis added.

Here, then, counseled parties made a deliberate effort to define a crucial term in the agreement. They defined that term in words with a quite definite legal significance. When they wished to give that term some special meaning different from its definition in the agreement, they so provided in unmistakable terms. We think the district court was correct in its conclusion that the intent of the parties was unambiguously evidenced by the writing itself. Under Wisconsin...