Friday, January 06, 2006

When is an alternative interpretation of a contract term plausible?

When it evokes applause from the court.

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

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.


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