Slatt v. Slatt, 64 N.Y.2d 966 (1985)

When the language of a contract is clear and unambiguous, a court must give effect to the intent of the parties as indicated by the language used, without resort to extrinsic evidence.

Summary

This case concerns the interpretation of a separation agreement. The wife sought enforcement of a clause providing for cost-of-living adjustments to annual payments. The husband argued the adjustments only applied to monthly payments and that his failure to pay the adjustments for 11 years constituted a waiver. The Court of Appeals held that the agreement’s language unambiguously subjected all enumerated payments to cost-of-living increases, and there was no evidence that conduct of the parties should be considered to ascertain their intent because no waiver was present in this case.

Facts

A separation agreement, drafted by the husband’s counsel, was executed on July 1, 1969, outlining support and maintenance payments from the husband to the wife until she either died or remarried. Paragraph fifth of the agreement specified periodic payments, including monthly installments and annual payments of $500 on December 31, 1969, and $1,000 on December 31st of each year thereafter. Subparagraph (g) stated that the wife would receive a cost-of-living increase based on the U.S. Department of Labor’s Consumer Price Index above the 1969 base figure. For 11 years, the husband did not pay cost-of-living increases on the $1,000 annual payments.

Procedural History

The trial court determined that the separation agreement obligated the husband to pay a cost-of-living increase on the annual payments. The Appellate Division affirmed, finding the language unambiguous and resolving any ambiguity against the husband, who drafted the agreement. The Court of Appeals affirmed the Appellate Division’s order.

Issue(s)

Whether the separation agreement unambiguously required the husband to pay a cost-of-living increase on the annual $1,000 payments, in addition to the monthly installments.

Holding

Yes, because the language of the agreement clearly evinced an intent to subject all enumerated payments to the cost-of-living increase, and the contract explicitly required modifications to be in writing while stating that failure to assert a right would not constitute a waiver.

Court’s Reasoning

The Court of Appeals emphasized that courts must discern the parties’ intent as evidenced by the written contract. Citing Laba v. Carey, 29 NY2d 302, 308, the court stated that it must give effect to the intent as indicated by the language used when it is clearly and unambiguously set forth. The court found the phrase “[i]n addition to the foregoing payments” unambiguously applied the cost-of-living increase to all payments listed, including the annual payments. The court distinguished cases where ambiguity or doubtful meaning existed, stating “[s]uch an inquiry might be appropriate in the instance of an ambiguity or where the contract is of ‘doubtful meaning’ (City of New York v New York City Ry. Co., 193 NY 543) or where there is claimed ‘waiver’, none of which is present in this case.” The court also noted the contract required modifications to be in writing and that failure to assert a right would not constitute a waiver, further supporting the wife’s claim. Therefore, there was no need to consider the parties’ conduct over the 11 years to ascertain their intent. The court refused to fashion a new contract under the guise of contract construction, citing Marlee Sales Corp. v Manufacturers Trust Co., 9 NY2d 16.