259 Conn. 665 | Conn. | 2002
Opinion
The sole question in this appeal is whether the language employed in three related agreements between the plaintiff and the defendant is clear and unambiguous, and, therefore, consideration of extrinsic evidence to ascertain the parties’ intent is prohibited. The defendant, Wisvest-Connecticut, LLC, appeals from the judgment of the trial court vacating an arbitration award that had granted damages to the defendant. We conclude that the language used in the agreements, when considered as a whole, is ambiguous and the arbitration panel therefore properly considered extrinsic evidence to determine the parties’ intent. Accordingly, we reverse the judgment of the trial court.
Under the terms of the power supply agreement, the defendant agreed to supply the plaintiff with the electricity required to bridge the gap between the amount of electricity the plaintiffs retained assets could generate and the amount needed to meet its retail load. The price for the electricity to be provided by the defendant was set forth in the power supply agreement. The parties also executed two letter agreements immediately prior to the execution of the power supply agreement. The first letter agreement (Hydro-Quebec agreement) addressed the manner in which the plaintiff was to use the electricity that it was purchasing from Hydro-Quebec, a Canadian utility company. The second letter agreement addressed the implementation of the power supply agreement in light of new market rules that had taken effect.
Three arbitrators were chosen for the arbitration panel and, after several days of hearings, the panel issued its decision and award. In a two to one decision, the panel majority concluded that the contract between the parties, as evidenced by the three agreements, was ambiguous with regard to whether the plaintiff had the
The plaintiff filed an application with the trial court seeking an order vacating the arbitration panel’s decision and award. The defendant filed a counterclaim to confirm the award. The trial court granted the plaintiffs application and denied the counterclaim, concluding that the language of the letter agreements was clear and unambiguous and that the majority of the panel improperly had considered extrinsic evidence of the parties’ intent. The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1.
As a preliminary matter, we acknowledge that our review in this case is limited. The arbitration provision in the power supply agreement provides that “[a]ll factual determinations made by the arbitrators shall be conclusive and binding on the Parties and not subject to judicial review.” This appeal, therefore, is limited to the single question of law in this case: whether the contract is ambiguous under Connecticut law. Imperial
In determining whether a contract is ambiguous, the words of the contract must be given “their natural and ordinary meaning.” Kelly v. Figueiredo, 223 Conn. 31, 35, 610 A.2d 1296 (1992). A contract is unambiguous when its language is clear and conveys a definite and precise intent. Levine v. Massey, 232 Conn. 272, 278, 654 A.2d 737 (1995). “The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity.” (Internal quotation marks omitted.) Id., 279. “Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.” (Internal quotation marks omitted.) Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758, 764, 621 A.2d 258 (1993). Furthermore, a presumption that the language used is definitive arises when, as in the present case, the contract at issue is between sophisticated parties and is commercial in nature. Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 494-97, 746 A.2d 1277 (2000).
In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language
The defendant claims on appeal that the trial court improperly concluded that the contract was clear and unambiguous on its face. Specifically, the defendant argues that the trial court placed undue emphasis on its predicate determination that the Hydro-Quebec agreement was intended to modify the appendix to the power supply agreement, which set forth the manner in which the quantity of electricity to be delivered would be calculated, and the court failed to consider adequately the purpose of the modification. The language in the Hydro-Quebec agreement, the defendant contends, did not clearly and unambiguously grant the plaintiff the right to sell Hydro-Quebec electricity in the open market prior to reaching the cap amount designated in that agreement. Rather, the language in the Hydro-Quebec agreement merely placed a cap on the amount of Hydro-Quebec electricity that the plaintiff otherwise would have been required to apply to its retail load. The plaintiff responds by arguing that the language in the Hydro-Quebec agreement granted the plaintiff the
On the basis of our review of the power supply agreement and the Hydro-Quebec agreement, we agree with the defendant that the language of the agreements was ambiguous. We conclude that the contract between the parties was ambiguous with regard to whether the plaintiff had the right to sell Hydro-Quebec electricity in the open market prior to reaching the designated cap amount, in lieu of utilizing that electricity to satisfy the plaintiffs retail load.
We begin our analysis with the terms of the power supply agreement. That agreement clearly provided that the term “retained assets,” as used therein, included the plaintiffs power purchase agreement with Hydro-Quebec.
The Hydro-Quebec agreement provided that “[the plaintiff] will have the right to utilize up to the [cap amount] of the energy scheduled for deliveiy by [Hydro-Quebec] to serve [the plaintiffs] own retail load, and [the plaintiff] will sell into the market all energy scheduled for deliveiy by [Hydro-Quebec] in excess of that amount.” (Emphasis added.) It appears from this provision that the Hydro-Quebec agreement was intended to modify the power supply agreement with respect to the plaintiffs use of Hydro-Quebec electricity.
The Hydro-Quebec agreement provided that the plaintiff had the right to use up to the cap amount of Hydro-Quebec energy “to serve [the plaintiffs] own retail load . . . .” (Emphasis added.) That provision, however, addressed only the plaintiffs right to apply Hydro-Quebec electricity to its retail load, and nothing in this or any other provision of the Hydro-Quebec agreement provided expressly that the plaintiff had the right, to sell precap Hydro-Quebec electricity in the open market. While it is not unreasonable to interpret this
Indeed, interpreting the language of the Hydro-Quebec agreement in such a manner could render meaningless the second half of the relevant provision, which provided that “[the plaintiff] will sell into the market all energy scheduled for delivery by [Hydro-Quebec] in excess of [the cap] amount.” Although this clause did not prohibit expressly the plaintiff from selling Hydro-Quebec electricity in the open market prior to reaching the cap, inteipreting the first clause of the provision to give the plaintiff the right to do so would appear to make the second clause superfluous. The law of contract interpretation militates against interpreting a contract in a way that renders a provision superfluous. Kelly v. Figueiredo, supra, 223 Conn. 36. At the very least, it is not clear and unambiguous from the language of the Hydro-Quebec agreement that the plaintiff had the right to sell Hydro-Quebec electricity in the open market prior to reaching the designated cap amount.
We conclude that the power supply agreement and the Hydro-Quebec agreement, read together, are ambiguous with regard to whether the plaintiff was obligated to utilize all of the Hydro-Quebec electricity to satisfy its retail load or whether the plaintiff, instead, had the right or discretion to apply only some of the Hydro-Quebec electricity to the retail load and the freedom to sell the balance of it in the open market. The presumption set forth in Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., supra, 252 Conn. 494-97—that the language employed by sophisticated
The judgment is reversed and the case is remanded to the trial court with direction to deny the application to vacate the arbitration award and to grant the counterclaim seeking to confirm the award and to render judgment accordingly.
In this opinion the other justices concurred.
“The well established general rule is that [w]hen the parties agree to arbitration and establish the authority of the arbitrator through the terms of their submission, the extent of our judicial review of the award is delineated by the scope of the parties’ agreement.” (Internal quotation marks omitted.) State v. AFSCME, AFL-CIO, Council 4, Local 2663, 257 Conn. 80, 84, 777 A.2d 169 (2001). Ordinarily, the scope of our review is determined by whether the submission was restricted or unrestricted. In this case, however, the arbitration provision in the contract provides: “Any conclusions of law made by the arbitrators shall be subject to review in any court of competent jurisdiction within the State of Connecticut . . . .’’Accordingly, our review of the arbitration panel’s conclusions of law is de novo.
The term “retained assets” was defined in article one of the power supply agreement as “the [plaintiffs] ownership interests in Seabrook Station [in] Seabrook, New Hampshire, Millstone Station Unit No. 3 [in] Waterford, Connecticut, and [the plaintiffs] purchased power agreements with the Bridgeport RESCO [an incinerator facility], Shelton Landfill and Derby Hydroelectric independent power producers and with Hydro-Quebec.”
By its terms, the Hydro-Quebec agreement was executed “for the purpose of resolving an issue as to the meaning of Retained Assets in the Power Supply Agreement” with regard to Hydro-Quebec electricity.