Columbia Gas Transmission Corp. v. Calo, 47 N.Y.2d 727 (1979)
When a contract’s terms are unambiguous, courts should not apply rules of construction, such as giving greater weight to handwritten provisions over printed ones.
Summary
Columbia Gas sought to lay additional pipelines on Calo’s property, relying on a right-of-way agreement. Calo argued a handwritten provision limited the right-of-way’s width, conflicting with a printed clause allowing additional lines within 16 feet of the first. The lower courts sided with Calo, prioritizing the handwritten provision. The Court of Appeals affirmed, finding an ambiguity requiring construction against the drafter, thus limiting Columbia Gas’s rights to lay additional lines outside the handwritten provision’s defined area. The dissent argued there was no conflict because the handwritten provision only applied to the initial line.
Facts
Columbia Gas obtained a right-of-way from Calo to lay pipelines on Calo’s land.
The agreement included a handwritten provision specifying the location of the initial pipeline within 50 feet of the north property line and within 15 feet of a cable line.
A printed clause granted Columbia Gas the right to construct additional pipelines alongside the first, within 16 feet, upon payment of a specified price per rod.
Columbia Gas attempted to lay additional lines, but Calo contended the handwritten provision restricted the right-of-way’s width, preventing additional lines outside that area.
Procedural History
The lower court ruled in favor of Calo, finding a conflict between the handwritten and printed provisions and prioritizing the former.
The Appellate Division affirmed.
The New York Court of Appeals affirmed the Appellate Division’s order.
Issue(s)
Whether the handwritten provision in the right-of-way agreement defined the width of the right-of-way, thereby creating a conflict with the printed provision allowing additional pipelines within 16 feet of the first line.
Holding
Yes, because the contract language created an ambiguity. When such an ambiguity exists, it must be interpreted against the drafter of the agreement.
Court’s Reasoning
The court found that the handwritten provision specifying the location of the initial pipeline created an ambiguity when considered alongside the printed provision allowing additional pipelines within 16 feet. The court reasoned that the handwritten provision could be interpreted as defining the width of the right-of-way. Therefore any additional line laid would have to be within the confines of the handwritten provisions. “Where an agreement is ambiguous, its language must be construed most strongly against the party who prepared it, and favorably to a party who had no voice in the selection of its language”
Because of this ambiguity, the court applied the principle that ambiguous contracts are construed against the drafter (Columbia Gas). This disfavored interpretation limited Columbia Gas’s right to lay additional pipelines outside the area described in the handwritten provision.
The dissenting judge argued that no conflict existed. The dissent reasoned that the handwritten provision merely located the initial pipeline. The printed provision for additional lines allowed them anywhere within 16 feet of the first, regardless of the handwritten provision’s area. Further, to interpret the contract otherwise would render meaningless the phrase, “as herein provided,” found in the printed portion of the contract that grants the right to lay additional pipe lines.