| Van Etten Oil Co., Inc. v Aero Star Petroleum, Inc. |
| 2015 NY Slip Op 06454 [131 AD3d 740] |
| August 6, 2015 |
| Appellate Division, Third Department |
[*1]
| Van Etten Oil Co., Inc., et al., Respondents, v AeroStar Petroleum, Inc., et al., Appellants. |
Rusk Wadlin Heppner & Martuscello, LLP, Kingston (Dennis B. Schlenker,Albany, of counsel), for appellants.
Steven N. Mogel, Monticello, for respondents.
Devine, J. Appeal from an order and two amended orders of the Supreme Court(Schick, J.), entered September 24, 2013, October 1, 2013 and November 1, 2013 inSullivan County, which denied defendants' motion for summary judgment dismissing thecomplaint.
Plaintiffs owned service stations and had wholesale franchise rights to sell brandedgasoline to several independent stations. Defendant Aero Star Petroleum, Inc. agreed topurchase several stations and the wholesale franchise from plaintiffs, and subsequentnegotiations led to the execution of an asset purchase agreement in October 2012. AeroStar committed to paying plaintiffs, in consideration for the wholesale franchise, fourcents for every gallon of gasoline it sold to the independent stations over the course ofthe year following the execution of the agreement. The agreement went on to providethat "[i]n the event [plaintiffs are] unable to deliver valid, currently existing supplycontracts together with estoppel certificates for the aforementioned [independentstations] or, in the event any such supply contract . . . shall be terminated. . . then . . . any reimbursement obligation of [Aero Star] to[plaintiffs] shall simultaneously end upon the happening of the final delivery of motorfuels under any such contract, written or casual agreement." After post-executiondiscussions, that provision was amended to state that the reimbursement obligationwould cease "upon the happening of the final delivery of motor fuels under any suchcontract, written agreement" (emphasis added).
Plaintiffs did not turn over valid, written supply contracts within the time allowed bythe agreement and, as such, Aero Star advised in February 2013 that it would notreimburse them for [*2]any sales made to the independentstations. Plaintiffs responded by commencing this action against Aero Star and itspresident, defendant Tariq Gujar, asserting a claim for breach of contract and sundryothers. Defendants served an answer and thereafter moved for summary judgmentdismissing the complaint, arguing solely that Aero Star had no legal obligation to makethe reimbursement payments given the language of the amended agreement.[FN*] Supreme Court foundquestions of fact as to that issue and denied the motion, prompting this appeal.
We affirm. It is well settled that "[a] written agreement that is clear and complete onits face must be enforced according to the plain meaning of its terms" (Matter of Warner v Board of Educ.,Cobleskill-Richmondville Cent. Sch. Dist., 108 AD3d 835, 836 [2013], lvdenied 22 NY3d 859 [2014]; see Samuel v Druckman & Sinel, LLP, 12 NY3d 205,210 [2009]). In order to determine whether the terms of an agreement are ambiguous, acourt must "examine the entire contract and consider the relation of the parties and thecircumstances under which it was executed" (Matter of Warner v Board of Educ.,Cobleskill-Richmondville Cent. Sch. Dist., 108 AD3d at 836 [internal quotationmarks and citations omitted]). "When the language of a contract is ambiguous, itsconstruction presents a question of fact which may not be resolved by the court on amotion for summary judgment" (Leon v Lukash, 121 AD2d 693, 694 [1986][citations omitted]; accord 1000N. of N.Y. Co. v Great Neck Med. Assoc., 7 AD3d 592, 593 [2004]).
As to the circumstances surrounding the execution of the agreement, the signatorieswere fully aware that the written supply contracts for the independent stations hadexpired. The language of the agreement reflects that reality, providing for a remedy ifplaintiffs failed to deliver valid supply contracts or those contracts were otherwiseterminated. Inasmuch as the independent stations were continuing to purchase gasoline inthe absence of a written supply contract, however, the agreement only relieved Aero Starof its obligation to reimburse plaintiffs for the sales "upon the happening of the finaldelivery . . . under any such contract, written or casual agreement." AeroStar, in short, was required by this language to reimburse plaintiffs if the informalpurchases of fuel by the independent stations continued. Aero Star thereafter obtained theconsent of plaintiffs to eliminate "or casual" from that provision. This alteration left amurky sentence proclaiming that the reimbursement obligation of Aero Star would endwhen a final delivery was made "under any such contract, written agreement." Aconjunction of some sort is required to make sense of this phrase and reveal when thereimbursement obligation of Aero Star ceases, namely, when the last delivery is madeunder either a contract that is also a written agreement, or when it is made underany contract or written agreement. Accordingly, even assuming that the necessary"and" or "or" could be supplied as a matter of interpretation (see Matter of Wallace v600 Partners Co., 86 NY2d 543, 547-548 [1995]), the agreement as a whole isunclear as to which was intended. Given the ambiguity in the agreement as to whetherthe absence of written supply contracts would permit Aero Star to cease reimbursementpayments, questions of fact preclude a grant of summary judgment to defendants (see Shields v Carbone, 78AD3d 1440, 1444 [2010]).
Defendants' remaining arguments were not raised in their motion papers, and "wewill not address [them] for the first time on appeal" (Dinneny v Allstate Ins. Co.,295 AD2d 797, 799 [2002]; see Voorheesville Rod & Gun Club v TompkinsCo., 82 NY2d 564, 570 n 1 [1993]; [*3]Jones v Castlerick, LLC,128 AD3d 1153, 1154 [2015]; compare Welch v De Cicco, 9 AD3d 725, 727 [2004]).
McCarthy, J.P., Egan Jr. and Lynch, JJ., concur. Ordered that the order and amendedorders are affirmed, with costs.
Footnote *:Defendants' motion forsummary judgment was branded as a cross motion, as plaintiffs had previously movedfor a preliminary injunction. Plaintiffs withdrew their motion, however, and SupremeCourt was only asked to resolve the motion for summary judgment.