“The part versus the whole” is the term I use to refer to ambiguity regarding whether a single member of a group of two or more is being referred to, or the entire group.
Along with materiality, it’s the most complex topic I’ve written about. That helps explain how the literature on drafting has so thoroughly botched this subject. It’s discussed in chapter 8 of MSCD, but until MSCD2 comes out, the definitive analyisis is in this law review article.
But yesterday I realized that I need to supplement that analysis. In reviewing a draft blog post containing my thoughts on an opinion from a few months back, I realized that the case pertainined to a kind of “the part versus the whole” ambiguity that I hadn’t previously considered.
The case in question is Crisler v. Crisler, 2007 Miss. App. LEXIS 549 (Miss. Ct. App., Aug. 28, 2007). It involved a dispute between a husband and wife regarding sale of some property and distribution of the proceeds under a settlement agreement they had entered into as part of their divorce proceedings.
Here’s how the court described the issue:
The parties’ disagreement stems from their separate interpretations of the following portion of paragraph 13.2: “[u]pon sale of the Airport Road Property, consisting of 42.89 acres, Al [Mr. Crisler] shall pay Dell [Mrs. Crisler] $ 300,000.00 of the net proceeds of the sale ….” Mr. Crisler claims that the clause only requires him to pay Mrs. Crisler her portion of the proceeds upon the completed sale of the entire 42.89 acre property. Mrs. Crisler disagrees and argues that Mr. Crisler is required to divide the proceeds upon each and every partial sale of the property. The chancellor held the clause to be ambiguous. In finding that Mrs. Crisler’s interpretation was in-line with the parties’ intentions, the chancellor found that Mr. Crisler’s interpretation was contrary to common sense as he could sell all but a fraction of the property and never be obliged to pay Mrs. Crisler any of the proceeds.
The appellate court agreed with the lower court that the language in question was ambiguous. It also held that the the lower court had not manifestly erred in using parol evidence to conclude that the parties had intended for proceeds to be disbursed with each sale of a portion of the property.
So what general conclusions can one draw from this case? That the “direct object” ambiguity engendered by plural nouns (as in Acme may sell the Shares) is also engendered by mass nouns. (Mass nouns are common nouns that presents entities as an unbounded mass. Click here for Wikipedia’s take on mass nouns.)
For example, Acme may sell the Property could mean that Acme may sell only the entire property or that it may sell all or part of the property. If you don’t take into account the second possible meaning, you might fail to address the implications of sale of part of the property. That’s exactly what transpired in the Crisler case.
I don’t really agree with the Crisler holding, but I deal with this problem a lot. I am normally careful to be specific where it matter (e.g., “Party A may terminate some or all of the Services”), but this problem can be less obvious. For example, if I say “the Customers may terminate this Agreement” where there are multiple signatories in the defined term “Customers”, does that mean that there must be a consensus among the Customers before the termination right kicks in, or is one Customer able to terminate on its own behalf?
In some ways, it’s encouraging to learn that Crisler court gave such a liberal reading to language that could very easily be dismissed as conclusive. What bothers me the most in Crisler example is the $300,000 figure and no mention of pro rating it for partial sale.
The phrase “upon the sale of the Airport Road Property, particularly in this context, seems inherently ambiguous. I see two possible meanings:
1. Upon the sale of ALL the property.
2. Upon the sale of ANY of the property.
The court was correct to admit parol evidence.