An Amusing Instance of Confusion

The following case caught my eye: Conrail v. Grand Trunk W. R.R. Co., 2011 U.S. Dist. LEXIS 137910 (D. Mich. Dec. 1, 2011). And not because it has anything significant to say about a given usage, but instead because of the pretty fundamental nature of the confusion on display, namely confusion over the meaning of the phrase “Trenton Steel Warehouse.”

I’ll let the court describe it:

In this case, the parties disagree about the meaning of “Trenton Steel Warehouse” in the 1996 Trackage Rights Agreement (“TRA”). The question for the court is whether “Trenton Steel Warehouse” is an ambiguous term. Looking at the contract itself, “Trenton Steel Warehouse” appears four times in the TRA. It first appears in the title of the TRA itself, which reads “Trackage Rights Agreement Between [Defendant] & [Plaintiffs] to Service Trenton Steel Warehouse.” Second, in Section 1, the TRA states:

[Defendant] hereby grants to [Plaintiffs] the right to operate …  in either direction over the following segments of [Defendant]’s railroad for the sole purpose of serving Trenton Steel Warehouse or its successor (hereinafter referred to as ‘Industry’), shown on the plan attached hereto, made a part hereof and marked ‘Exhibit A’ (hereinafter referred to as the ‘Trackage’).

The reference to a successor seems to suggest that “Trenton Steel Warehouse” could be a company or entity doing business.

The third place “Trenton Steel Warehouse” appears in the TRA is in the map attached as Exhibit A. This map shows a simplified depiction of the Trackage, over which Defendant would grant Plaintiffs access pursuant to the TRA. On the map, the words “Trenton Steel Warehouse” are boxed in, and beyond Defendant’s property line, to the East. The fact that “Trenton Steel Warehouse” is boxed in on Exhibit A indicates that in the TRA, Trenton Steel Warehouse is meant to describe the actual physical warehouse on that property.

The map itself, however, is not a completely accurate depiction of the area. The TRA indicates that the Trackage includes the tracks “up to but not extending beyond … [Defendant] property line.” In the map, the solid line that extends from Defendant’s property line to the boxed in “Trenton Steel Warehouse” is not part of the Trackage. The map, however, depicts it in the same thick, solid black line that the key indicates shows the Trackage. Additionally, if the boxed in “Trenton Steel Warehouse” is the building on that property, the map incorrectly depicts that the railroad tracks run east-west, running directly into the east side of the building. In fact, the tracks curve around and enter the warehouse building on the south side.

The final place the TRA mentions “Trenton Steel Warehouse” is in the title of the General Conditions, which follow the agreement. The title reads, “General Conditions to Trackage Rights Agreement Dated as of May 1, 1996, Between [Defendant] and [Plaintiffs] Relating to Trackage Rights for [Plaintiffs] to Service Trenton Steel Warehouse at Trenton, Michigan.”

The TRA as a whole does not appear to give a clear, unambiguous meaning to Trenton Steel Warehouse. … .

[U]nfortunately, “Trenton Steel Warehouse” does not appear to have a commonly understood meaning.

So “Trenton Steel Warehouse” was so central to the contract that it appeared in the title, but no one got around to specifying clearly what the heck it meant.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.