Shifrin v. Forest City Enterprises, Inc.

597 N.E.2d 499, 64 Ohio St. 3d 635

• Court: Ohio Supreme Court
• Decided: September 9, 1992
• Docket: No. 91-1344
• Status: Published

Opinions

Bryant, J.

Shifrin’s primary contention, contained in the first and second propositions of law, is that the court of appeals’ determination that the releases extinguished Shifrin’s claims is contrary to the intent of the parties. Specifically, Shifrin points to the testimony of Forest City’s president, Albert Ratner, that Shifrin was entitled not only to the agreed purchase price of $8.7 million, but also to a distributive share from the operation of the mall during the interim period, the amount of which could not be ascertained until after closing. Shifrin further notes Forest City’s post-closing tender to Shifrin of $76,356.34, based on Forest City’s determination of Shifrin’s distributive share. Shifrin then argues that Ratner’s testimony and the tendered money reveal the parties’ intention to except from the releases claims relating to payment of Shifrin’s distributive share during the interim period. For the reasons which follow, we find that under the unambiguous terms of the releases between the parties, Shifrin released all claims asserted herein, and we affirm the judgment of the court of appeals.

Generally, courts presume that the intent of the parties to a contract resides in the language they chose to employ in the agreement. Kelly v. Med. Life Ins. Co. (1987), 31 Ohio St.3d 130, 31 OBR 289, 509 N.E.2d 411, paragraph one of the syllabus; Aultman Hosp. Assn. v. Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 544 N.E.2d 920, syllabus. Only when the language of a contract is unclear or ambiguous, or when the circumstances surrounding the agreement invest the language of the contract with a special meaning will extrinsic evidence be considered in an effort to give effect to the parties’ intentions. Kelly, supra, at 132, 31 OBR at 291, 509 N.E.2d at 413. When the terms in a contract are unambiguous, courts will not in effect create a new contract by finding an intent not expressed in the clear language employed by the parties. Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 246, 7 O.O.3d 403, 406, 374 N.E.2d 146, 150.

Accordingly, the threshold issue controlling our determination of the contractual intent of the parties herein is whether the releases in the auction agreement and assignment instrument are ambiguous. In Alexander, supra, paragraph two of the syllabus, we set forth a test for determining whether contract terms are ambiguous: “Common words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument.” See, also, Aultman Hosp., supra, 46 Ohio St.3d at 54, 544 N.E.2d at 923. If no ambiguity appears on the face of the instrument, parol evidence cannot be considered in an effort to demonstrate such an ambiguity. See Stony’s Trucking Co. v. Pub. Util. Comm. (1972), 32 Ohio St.2d 139, 142, 61 O.O.2d 388, 389, 290 N.E.2d 565, 567.

Under paragraph 5(a) of the auction agreement, effective on consummation of the agreement,² the parties released each other from “all claims of every kind” with respect to the partnership from its inception, with the single exception of claims relating to a partnership utility account not relevant to the dispute herein.³ Similarly, the language of the assignment instrument releases the partnership from “further claims against the partnership” without exception, effective upon Shifrin’s transfer of the partnership interest to Forest City.⁴

Giving the terms of the releases their ordinary meaning, the releases indicate unambiguously the intent of the parties to release all of Shifrin’s claims against the partnership at issue herein, including those arising during the interim period, effective upon transfer of Shifrin’s partnership interest to Forest City. See Whitt v. Hutchison (1975), 43 Ohio St.2d 53, 60, 72 O.O.2d 30, 34, 330 N.E.2d 678, 683. While the evidence Shifrin cites shows that Forest City intended under the contract to pay Shifrin’s distributive share during the interim period, an intent not inconsistent with the language of the releases, the releases contain no exceptions preserving Shifrin’s right to enforce such payments after the closing.

Shifrin attempts to circumvent the lack of a facial ambiguity in the releases by asserting that the parties would not have agreed that Forest City was obligated to pay Shifrin’s distributive share during the interim period without providing Shifrin the means legally to enforce such payments, and that a “latent ambiguity” thus exists in the parties’ agreements that justifies the use of parol evidence to show the intent of the parties, even if the terms of the releases are unambiguous.

While the record reveals that Forest City intended to contract for distributive payments during the interim period, the record does not similarly support Shifrin’s contention that Forest City mistakenly, much less fraudulently, failed to include provisions in the agreements for enforcing that right. Shifrin having failed to demonstrate fraud, mutual mistake or the existence of an ambiguity on the face of the contract that would allow that court to vary the clear terms of the contract, parol evidence cannot be used to demonstrate a “latent ambiguity” in the contract between Shifrin and Forest City. Charles A. Burton, Inc. v. Durkee (1952), 158 Ohio St. 313, 49 O.O. 174, 109 N.E.2d 265, paragraph two of the syllabus; Cassilly v. Cassilly (1897), 57 Ohio St. 582, 49 N.E. 795.

Accordingly, Shifrin’s first and second propositions of law are overruled.

Shifrin’s third proposition of law asserts that the trial court incorrectly applied the legal doctrines of anticipatory release and accord and satisfaction, and that those legal doctrines have no application herein. Shifrin did not raise this argument in the court of appeals and, thus, has waived it. State v. Williams (1977), 51 Ohio St.2d 112, 5 O.O.3d 98, 364 N.E.2d 1364, paragraph two of the syllabus. Nevertheless, even if we were to agree that the trial court erred by applying these legal doctrines to the facts of this case, our disposition of appellants’ first two propositions of law renders harmless any error in the trial court’s treatment of those issues.

The judgment of the court of appeals is affirmed.

Judgment affirmed.

Sweeney, Acting C.J., Douglas, Wright, H. Brown and Resnick, JJ., concur. Holmes, J., dissents. Peggy Bryant, J., of the Tenth Appellate District, sitting for Moyer, C.J.

2 . While the term “consummation” may be less than clear, thus raising a potential ambiguity regarding the date the release contained in the auction agreement became effective, the parties stipulated that the consummation date was the date of closing.

3 . The release in the auction agreement states:

“5. (a) Effective on consummation of this agreement, each party releases and discharges the other from all claims of every kind with respect to the partnership from its inception and the Property, with the exception stated in (b) below [relating to utility charges during a time period not in dispute herein]. * * * ”

4 . The release in the assignment instrument provides that:

“ * * * effective on and after the date of the transfer of such interest, the Shifrin Partners shall have no further claims against the Partnership or liability under any claims, legal or equitable, proceedings, suits, judgments, decrees, liabilities, obligations and/or taxes, which accrue on or after the effective date hereof * *