Page 5 - Litigation

NYLJ.COM |
Litigation | MONDAY, DECEMBER 14, 2015 | S5

assessed in context with other proof devel- is complete, clear and unambiguous on
New York courts also have hesitated to grant motions in limine when
oped through discovery.9
its face must be enforced according to
There are, however, exceptions to these they are made at the outset of litigation, reasoning that evidentiary rul- the plain meaning of its terms.” Parol
general practices, as two trial court cases ings should be made at or near the time of trial so that the issues can evidence—evidence outside the four
demonstrate. In one case, Schron v. Grunstein, corners of the document—is admissible
32 Misc.3d 231, 239 (Sup. Ct. N.Y. Co. 2011), be assessed in context with other proof developed through discovery.
only if a court inds an ambiguity in the
aff’d sub nom, Schron v. Troutman Saunders, contract.15
97 A.D.3d 87, 95 (1st Dep’t 2012), aff’d, 20 Courts are capable of ruling on the thresh-
N.Y.3d 430, 437 (2013), the court granted a old issue of ambiguity early in the litigation the defendants’ use of parol evidence. In clear and complete agreement. In view of that,
motion in limine, made relatively early in the life-cycle. Doing so does not require a court to opposition, the defendants maintained that the court reasoned, “‘[a]ny such discovery

litigation, to preclude the use of parol evi- consider whatever evidence could be devel- the motion was inappropriate because: (1) it would simply be an opportunity for plaintiff
dence. In the other, MBIA Ins. v. Countrywide oped during discovery because the question was premature; (2) the court had not yet to uncover parol evidence to attempt to cre-
Home Loans, 30 Misc.3d 1201[A], 1201A (Sup. of whether or not a contract clause is ambigu- even seen the evidence the plaintiff sought ate an ambiguity in an otherwise clear and
Ct. N.Y. Co. 2010), the court granted a “permis- ous typically can be determined from the face to exclude; and (3) the motion was “an inap- unambiguous agreement.’”13 “‘Unless this
sive” motion seeking a ruling that a particular of the contract.
propriate attempt at a disguised summary Court were to ind an ambiguity,’” the court
form of proof would be admissible at trial.
The strategy employed by the plaintiff in judgment.”10 The trial court disagreed, con- added, “‘such parol evidence would be inad-
At issue in Schron v. Grunstein (Schron) Schron also allows for a possible “second cluding that the loan agreement and the missible at trial or on a subsequent motion
were two contracts—a loan agreement and an bite at the apple” if the court denies the in option agreement were separate contracts; for summary judgment.’”14

option agreement—executed by the parties. limine motion on the basis that the contract that the agreements contained merger and The Appellate Division, First Depart-
The defendants, who refused to honor the provision at issue is ambiguous. “Summary integration clauses, which explicitly barred ment, and thereafter the New York Court of
plaintiff’s exercise of the option agreement, judgment is not limited to those cases where the use of parol evidence; and, further, that Appeals, afirmed. Although neither explicitly
maintained that the two contracts were, in the contract is free from ambiguity and not the contractual language was unambiguous, addressed the timing of the motion in limine,
reality, part of one agreement and should be subject to differing interpretations.”16 In containing no language that made funding of the Court of Appeals’ explanation of the evi-
read together. Relying primarily on extrin- such cases, summary judgment is appropri- the loan an express condition precedent to dentiary question at issue sheds light on the
sic evidence, they argued that they had no ate when the uncontradicted extrinsic evi- the plaintiff’s right to exercise the option.11 rationale for permitting such an early motion
duty to perform under the option agreement dence deinitively establishes the meaning of Thus, the court granted the plaintiff’s in limine despite the general rule disfavoring motions
because performance under the loan agree- the ambiguous language.17 In other words, a motion.
in limine prior to the conclusion of discovery:

ment was a condition precedent to perfor- “loss” in a Schron-style in limine motion made The court explained that because the
mance under the option agreement and, they early in a case does not necessarily mean agreement at issue was unambiguous, it was Under New York law, written agreements
alleged, the plaintiff had failed to satisfy his that summary judgment cannot be granted not necessary to wait until after discovery are construed in accordance with the
obligations under the loan agreement.
later in the case.
closed to rule on whether parol evidence parties’ intent and “[t]he best evidence
Relatively early in the litigation, and well In MBIA Insurance v. Countrywide Home would be admissible.12 The court noted that a of what parties to a written agreement
prior to the conclusion of discovery, the Loans (Countr ywide”), the plaintiff sued the party is not allowed to submit parol evidence intend is what they say in their writ-
plaintiff iled a motion in limine to preclude
defendants for fraud and breach » Page S11
in order to create ambiguity in an otherwise
ing.” As such, “a written agreement that

Bates Group: An End to End Solution
Investigation / Arbitration / Litigation / Regulatory / Compliance Services

________________________________________________________________________

INDIVIDUAL
INSTITUTION REGULATORY AUTHORITY STATE OR LOCAL GOVERNMENT

Evolves into Becomes a Requiring Best
Sensitive Client Litigation Regulatory Practice/Compliance
Matter Arises
or Arbitration Investigation
Enhancements
or Examination

Internal Investigation
Meet with Regulators
Policies & Procedures
Client Complaint
Economic / Forensic Analysis
Retain Experts
Supervisory Systems & Controls
Supervision Finding

Security / Portfolio Valuation
Recommendation
Compliance Testing
Exception Report
Retain Consultants & Experts
Arbitration, Mediation or Hearing

Finding, Settlement or Award

Bates Group provides powerfull and innovative solutions to assist inancial services clients and their counsel throughout
the life cycle of their legal and compliance matters. We have been a trusted partner to our clients for over 30 years.

To learn how Bates Group can help your irm, please contact us at (503) 670-7772 or at www.batesgroupllc.com

Bates Group provides powerful and innovative solutions to assist financial services

clients and their counsel throughout the life cycle of their legal and compliance matters.
We have been a trusted partner to our clients for over 30 years.

To learn how Bates Group can help your firm, please contact us at (503) 670-7772