Tuesday, February 3, 2009
The cosmos aligned perfectly: on the very day I taught ambiguity, the New York Law Journal reported a New York County Supreme Court case about ambiguity. And now I can demonstrate the doctrine is not just for the birds.
In WebMD LLC v. RDA International Inc., the parties entered into a January 2007 internet advertising contract, pursuant to which plaintiff guaranteed " . . . 36,000 visitors to WebMD Health Zone and WebMD related condition centers driving to www.eucerin.com website." In October and December of that same year, the parties again contracted for advertising space; in the October contract, the plaintiff guaranteed that there would be 6,791,727 impressions, and in the December contract, the plaintiff promised 605,311 impressions.
When defendant failed to pay in full the some $450,000+ owed under the advertising contracts, plaintiff sued. The defendant had acknowledged owing money under the contracts, but asserted the affirmative defense that plaintiff had failed to fully perform its end of the bargain:
According to defendant, an "impression" is an internet user who accesses a website once in a 30 minute time frame; that user may be counted as a second "impression" if, after the 30 minutes, he or she accesses the site again. Defendant asserts that, by counting the same user multiple times, plaintiff failed to provide 36,000 "unique" visitors. Defendant's assertions are based on definitions by the Interactive Advertising Bureau, Media Rating Council, and Advertising Research Foundation, promulgated between 2001 and 2004, which defined a "unique visitor" as an internet user who is only counted once, regardless of the number of times he or she accesses a site. Based on these definitions, defendant maintains that plaintiff only performed 70-80 percent of its contractual promises.
Plaintiff moved for summary judgment and to strike defendant's affirmative defenses. The motions turned on whether the word "visitors" as used in the parties' contracts was ambiguous. The court (Ling-Cohan, J.) held that the term was unambiguous:
It is a settled rule that whether a contract is unambiguous is a question of law that may be decided by the court. * * * In the instant case, the contract clauses have been provided. The contract provision, as cited above, guarantees that plaintiff will provide 36,000 visitors to the site, not 36,000 "unique visitors." Defendant does not dispute the total number of visitors to the site as calculated by plaintiff, but complains that the visitors were not "unique visitors."
Although the term "visitors" is not specifically defined in the contract, the lack of a definition does not, in and of itself, create an ambiguity. As stated in Graev v. Graev (46 AD3d 445, 451 [1st Dept 2007]), "extrinsic evidence cannot be used to create an ambiguity in an agreement, but only to resolve an ambiguity. That one party to the agreement may attach a particular, subjective meaning to a term that differs from the term's plain meaning does not render the term ambiguous [internal citations omitted]."
Here, although undefined, the term "visitors" is unambiguous. The definitions advanced by the organizations quoted by defendant refer to "unique visitors," and do not define the term "visitor" to mean "unique visitor." If defendant wished to be guaranteed "unique visitors" to the site, it should have specified such in the agreement.
Even if the term "visitors" were deemed to be ambiguous, its interpretation remains the exclusive function of the court unless the "determination of the intent of the parties depends on the credibility of extrinsic evidence . . . [internal quotation marks and citation omitted]." Village of Hamburg v. American ref-Fuel Company of Niagara, L.P., 284 AD2d 85, 88 (4th Dept 2001). This is especially true where the contract is entered into by sophisticated and counseled business people.
* * *
In the instant matter, defendant is asking the court to reform the terms of the agreement to conform to a definition provided by an organization that is not a party to the agreement, and has not submitted any evidence or argument that, at the time of the execution of the agreement, the parties intended something other than what appears on the face of the contract. This the court cannot do. * * *
The court granted plaintiff's motions.
WebMD LLC v. RDA International Inc., 102830/08, NYLJ 2/2/09 (New York County Supreme Court Jan. 6, 2009)
[Meredith R. Miller - h/t Patricia Sturm]