Circumstances often change after parties enter into a contract and disputes arise as to what the participants originally intended by the agreement. In their quest to ensure that all are treated fairly and secure the benefits of their bargain, judges will typically "interpret" the wording of the contract and will determine its legal effect but, absent special circumstances, are not permitted to "rewrite" or alter the arrangement's terms.
A recent case, 200 Genesee St. Corp. v. City of Utica, demonstrates the application of this rule.
In 1979, the City of Utica signed a 35-year lease with 200 Genesee St. Corp. for 235 spaces in a garage "to be constructed." The agreement provided that the City's structure would contains some 400 "parking spaces," but did not represent that Genesee's spots would be "covered." While all the spaces in that garage were originally enclosed, in 1986, the building was expanded to include an uncovered floor of parking. In 2003, as the City leased out "covered" spaces to others, Genesee was eventually deprived of its 235 enclosed slots and litigation ensued.
On motion, the Oneida County Supreme Court dismissed Genesee's case. On appeal the Appellate Division, Fourth Department, reversed finding that at the time the parties entered in the lease--since the building was originally designed and erected as an enclosed structure--they intended all of Genesee's parking spaces to be covered. As the Appellate Division noted:
Here, the parking agreement provides that plaintiff is entitled to 235 of the 400 parking spaces in the original garage. The fact that the parking agreement did not describe the spaces as "covered" is of no consequence, inasmuch as the parking agreement specifies that the location of the parking spaces is in the original garage "to be constructed," and all of those parking spaces were covered spaces. Although we recognize that the parking agreement does not allocate a specific location for the 235 parking spaces referred to therein, we note that the parking agreement nevertheless reserves for plaintiff 235 parking spaces in the 400-space garage that is the subject of the parking agreement and the federal grant, all of which spaces were covered spaces.In a dissent, two Justices of the Appellate Division disagreed with the outcome and correctly observed that, "Had plaintiff wanted to ensure that its unallocated parking spaces were limited to covered spaces, it should have so provided in the parking agreement."
The New York State Court of Appeals concurred with the dissenters and reversed the Appellate Division, concluding as follows:
The contract is silent on the location of those spaces and the number of floors in the parking garage. Inasmuch as the contract was negotiated between sophisticated business people negotiating at arm's length, Supreme Court appropriately refrained from reading language into the contract that the parties agreed the City would provide plaintiff with 235 "covered" parking spaces....In order to avoid exposure to unwanted results, it is of critical importance to work in conjunction with counsel to ensure that your back is covered and that problems are anticipated before they arise.
For a copy of the Court of Appeals's decision in the 200 Genesee St. Corp. v. City of Utica, please click on the following link:
For a copy of the Appellate Division's decision in this case, please click on the following link: