504 F. App'x 487
6th Cir.2012Background
- Omnicom, as BBDO Detroit’s guarantor, sought declaratory relief that the Lease was validly terminated; 880 West counterclaimed that the Lease remained in full force.
- Lease term is 20 years; termination condition Section 3.3(a) allowed termination if BBDO Detroit ceased advertising for Chrysler and/or affiliates; definition of affiliates unclear.
- During negotiations, DaimlerChrysler merger discussed; December 1998 amendment replaced Chrysler Corporation with DaimlerChrysler AG in the termination condition without explanation.
- DaimlerChrysler AG later became Daimler AG; Chrysler bankruptcy in 2009; Chrysler Group LLC succeeded Chrysler LLC and contracted with BBDO Detroit.
- In 2010, BBDO Detroit terminated the Lease; 880 West disputed termination; district court found ambiguity but ultimately held termination valid; on appeal, affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ambiguity of 'affiliates' and 'Daimler Chrysler AG' | Omnicom argues both terms are ambiguous. | 880 West argues terms are unambiguous | Ambiguity exists; extrinsic evidence permissible |
| Effect of integration clause on extrinsic evidence | Extrinsic evidence allowed to interpret ambiguous terms. | Integration clause bars extrinsic evidence | Integration clause does not bar extrinsic evidence for ambiguous terms |
| Proper interpretation of ambiguous terms | Extrinsic evidence supports narrower scope tied to Omnicom entities servicing Chrysler | Terms should be interpreted broadly to include Daimler-related entities | District court’s interpretation supported by credibility and evidence; not reversible |
Key Cases Cited
- Sault Ste. Marie Tribe of Chippewa Indians v. Granholm, 475 F.3d 805 (6th Cir. 2007) (extrinsic evidence when contract ambiguity exists)
- UAW-GM Human Resources Ctr. v. KSL Recreations Corp., 579 N.W.2d 411 (Mich. Ct. App. 1998) (parol evidence rule; ambiguity exception)
- Port Huron E. Ass’n v. Port Huron Area Sch. Dist., 452 Mich. 309 (Mich. 1996) (ambiguity and weighing extrinsic evidence in contract terms)
- United Rentals (North America), Inc. v. Keizer, 355 F.3d 399 (6th Cir. 2004) (ambiguous terms construed against drafter)
- Shay v. Aldrich, 790 N.W.2d 629 (Mich. 2010) (parol evidence rule and ambiguity concepts)