The First Circuit on “Including”

On Tweetdeck, I have a column for tweets that contain the words “contract” and “drafting.” From the tweets that show up there, every so often I learn about stuff that I might otherwise have missed.

For example, today I saw the following:

So thanks to Mr. Durken’s tweet, I learned about the First Circuit Court of Appeals decision in VFC Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, 735 F.3d 25 (1st Cir. 2013) (PDF copy here).

This decision relates to a dispute between a borrower and its guarantor (the appellants), on the one hand, and a lender, on the other hand, over various expenses incurred in foreclosing on a parcel of real estate following a loan default.

Here’s what the court says about the language at issue:

The Indemnity Agreement provides in relevant part that Cadle and Cadlerocks would indemnify the Original Lender and its assignees and successors (“Indemnitees”) “from and against all … costs, … demands, … expenses” and other liabilities “of any kind or nature whatsoever … sought from or asserted against Indemnitees in connection with, in whole or in part, directly or indirectly, … the presence, suspected presence, release, suspected release, or threat of release of any Hazardous Material” on or around the Property. It further specifies that “[s]uch Liabilities shall include” seven particular categories of liability, only one of which is arguably applicable here: “the cost required to take necessary precautions to protect against the release of any Hazardous Materials in, on, or under the Property, the air, any ground water, waterway or body of water, any public domain or any surrounding areas to the Property.”

The question was whether the appellants had to reimburse costs of environmental testing; the First Circuit held that they did not.

In that part of the opinion that concerns us, the court held that “the second sentence limits the terms of the first.” More specifically, the court held that given the context, “It makes more sense to read the second sentence as imposing reasonable limitations on the first.”

The court then said the following (citations omitted):

We also note that the second sentence does not include the typical language parties often use to introduce a list of non-exclusive examples, such as “shall include but not be limited to,” or “without limiting the foregoing, [the term] shall include.” Although such language is of course not obligatory, its absence does weigh against reading the second sentence as a list of non-exclusive examples.

In MSCD 13.271 I cite other caselaw to the same effect, but those cases didn’t lead me to conclude that I should always use without limitation when introducing a non-exclusive list with including. This case won’t change that, for two [no, three] reasons:

First, the primary meaning of including is that that the items in the list that follows are illustrative examples. There’s plenty of caselaw that endorses that meaning. That being the case, always tacking on without limitation would, to the average reader, seem a tautology, and an annoying one at that.

And second, some courts have been willing to hold that including or includes is restrictive even when so modified. (See MSCD 13.274–78. So you can’t count on without limitation to preclude a restrictive meaning.

[And third, drafters use without limitation and but not limited to reflexively, without stopping to think, with respect to any given instance of including, “Is this use of including in fact unrestrictive?” Drafting on autopilot is never a good thing.]

So I recommend a different approach. I’m careful with how I use including. For one thing, I don’t follow it with a list of obvious examples of the noun or noun phrase preceding including. In other words, I wouldn’t say fruit, including oranges, lemons, and grapefruit—that’s just asking for a court to wonder whether “fruit” means “citrus fruit.”

Instead, I using including when I want to make it clear that the preceding noun includes something that otherwise might not fall within its scope—fruit, including tomatoes. (Are tomatoes a fruit or a vegetable? Your answer might depend on whether you’re a botanist or a cook.) That sort of disciplined use of including precludes a court from giving it a restrictive meaning.

If the client’s needs leave me no choice but to include a list of obvious members of the class, putting the general word last can provide a clearer way to do so without having a restive meaning attributed to the list—oranges, lemons, grapefruit, and other fruit, whether or not citrus. That structure allows you build in a phrase such as whether or not citrus, which provides a sure means of ensuring a nonexclusive meaning.

So as regards the language at issue in VFC Partners 26, I wouldn’t seek to fix it by adding “without limitation” before “including.” Instead, I’d do it over. That might require adjusting both the first sentence and the second sentence.

 

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.