Contracts

Utah Transit Authority v. Salt Lake City So. R.R. Co., Inc, 2006 UT App 46

Some guy crashed his bicycle on a section of railroad track near 17th south and 200 west. I believe the section is now predominately a Trax line. But at the time (1998), UTA owned it but was not yet using it for Trax service. Southern Railroad had a limited easement for freight rail service and was responsible for maintaining the track.

The bicyclist sued pretty much everybody he could think of, including UTA and Southern. UTA asked Southern to indemnify it under the terms of their Administration and Coordination Agreement. Southern refused, claiming that contract only required maintenance for freight service, not bicycle safety.

The court of appeals disagreed. If held that the language of the contract unambiguously put the duty to maintain the safety of the track on Southern. It thus affirmed the trial court's award of $238,190.69 to UTA for indemnification for litigation costs.

I wonder, what was the $.69 for? Paper clips?

Saleh v. Farmers Ins. Exchange, 2006 UT 1.

Q: When is an alternative interpretation of a contract term plausible?

A: When it evokes applause from the court.

Whatever you think of the merits of Justice Nehring's opinions, he at least makes an effort to make a boring case interesting to read.

Saleh wanted more money from Farmers to pay for his house that burnt down. The parties disagreed on the correct interpretation of the payment timing clause in the insurance policy. Saleh claimed that clause was ambiguous because it was susceptible "two or more plausible meanings." On the edge of your seat yet?

Justice Nehring had this to say about when an alternative meaning is a "plausible meaning":

"Plausible" entered the English language from the Latin verb "plaudere," to applaud. Although the primary meaning of the word has evolved to mean likely or reasonable to a degree falling somewhat short of certainty, vestiges of its root live on in its connotation. In other words, to earn the designation of plausible, a notion, explanation, or interpretation must impart confidence in its credibility sufficient to merit our applause. A standing ovation is not required, a discreet collision of the palms will do, but there must be reason to applaud.

He clarifies:

In other words, for a proffered alternative interpretation to merit a court’s applause, it must be more than a conjecture but may be less than a certainty.

So, with respect to Saleh's claim of an plausible alternate meaning, the relevant inquiry is

Is this an interpretation that sparks the impulse to applaud?

The court's answer to that inquiry:

This is an effort at interpretation that leaves us sitting on our hands.