PRESENT: All the Justices
LOUISE ROBERTS EURE
OPINION BY
v. Record No. 011633 JUSTICE DONALD W. LEMONS
April 19, 2002
NORFOLK SHIPBUILDING & DRYDOCK
CORPORATION, INC., ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
Everett A. Martin, Jr., Judge
In this appeal, we consider whether the trial court erred
in finding the language of an agreement to provide health care
coverage to Louise Roberts Eure (“Mrs. Eure”) unambiguous and in
not considering parol evidence to determine the intent of the
parties to the agreement. We further consider whether the trial
court properly dismissed a holding company, United States Marine
Repair, Inc., (“U.S. Marine Repair”) as a party in a suit
against its subsidiary, Norfolk Shipbuilding & Drydock
Corporation, Inc. (“Norshipco”).
I. Facts and Proceedings Below
Mrs. Eure entered into an agreement and general release
(the “Agreement”) with Norshipco on April 3, 1992. The
Agreement was part of a settlement of a debt owed to Norshipco
by Charles H. Eure, Jr., Mrs. Eure’s deceased husband. As part
of the Agreement, Mrs. Eure agreed to give up certain valuable
rights and assets owed to her by Norshipco, and Norshipco agreed
to provide Mrs. Eure with health care coverage at Norshipco’s
expense for the remainder of her life.
Paragraph 2 of the Agreement provides for Mrs. Eure’s
health care coverage and states in pertinent part:
Mrs. Eure will be afforded health care at
Norshipco’s expense throughout her
remaining lifetime, under the existing
Norshipco health plan and any future
enhancements available to key executives,
or any replacement plan which provides to
her coverage substantially equivalent to
that which would be available if Mr. Eure
were living and holding office as
President of Norshipco.
At the time the Agreement was made, Mrs. Eure was receiving
benefits under two plans. Norshipco provided basic medical
insurance through Blue Cross, 1 and also provided an “Officers’
Medical Expense Reimbursement Plan” (“reimbursement plan”) that
paid for certain expenses Blue Cross did not cover.
U.S. Marine Repair acquired Norshipco in October of 1998.
Mrs. Eure subsequently received a letter from John Humphreys of
Norshipco informing her that as of December 15, 1998, the
reimbursement plan was being terminated for all officers.
On February 18, 2000, Mrs. Eure filed an amended motion for
declaratory judgment against both Norshipco and U.S. Marine
Repair. She requested that the trial court declare:
[T]hat the coverage promised [to her]
under the provisions of paragraph 2 of the
Agreement is to be determined by the
coverage in effect at the time of the
Agreement, and not be diminished or
1
The basic coverage provider was subsequently changed to
Sentara.
2
discontinued in part simply because the
executive health plan at that time has
subsequently been discontinued by
Defendants.
Norshipco filed a motion for summary judgment and alleged
that paragraph 2 of the Agreement was clear and unambiguous;
therefore, the trial court should not consider parol evidence
when interpreting the Agreement. In her brief in opposition to
Norshipco’s motion for summary judgment, Mrs. Eure asserted that
the Agreement “provides her with the medical coverage which was
in effect at the time of the Agreement and that the coverage
cannot be diminished or discontinued.” She maintained that
“the agreement [was] clear in this respect.” The trial court
denied Norshipco’s motion for summary judgment because it found
that the Agreement was ambiguous. Norshipco subsequently
renewed its motion for summary judgment, claiming that
“discovery has established that the Plaintiff cannot point to
any parol evidence or witness testimony which would clarify the
meaning beyond the written words of the instrument.” The trial
court again overruled the motion.
U.S. Marine Repair filed a demurrer, asserting that it
bought the stock of Norshipco on September 30, 1998, and “in
essence, is a holding company of the stock of Norshipco as an
investor.” U.S. Marine Repair explained that Norshipco remains
3
a freestanding legal entity, and U.S. Marine Repair was not a
party to the Agreement between Mrs. Eure and Norshipco.
The trial court allowed the introduction of parol evidence
at trial to determine the intent of the parties with respect to
the health care benefits clause of the Agreement. E. L. Carlyle
(“Carlyle”), who was Senior Vice President and Chief Financial
Officer of Norshipco in 1992 and signed the Agreement, testified
on behalf of Mrs. Eure. In response to the question whether the
health care benefits were “supposed to be retractable by
Norshipco,” Carlyle testified that he “believe[d] it was the
intent that Mrs. Eure was to have these benefits for the rest of
her life.”
Furthermore, during cross-examination of Mrs. Eure,
Norshipco admitted two letters into evidence. The first was a
letter dated March 23, 1992, to Robert C. Nusbaum (“Nusbaum”),
Mrs. Eure’s attorney, from Walter B. Martin, Jr. (“Martin”),
Norshipco’s attorney. The letter outlined the “terms and
conditions of the settlement” between Mrs. Eure and Norshipco.
With respect to the health care coverage, the letter stated that
“Mrs. Eure will be maintained under the Norshipco health care
plan, or a plan providing equal coverage, until her death.” The
second letter was the response from Nusbaum to Martin, dated
March 27, 1992. In this letter, Nusbaum informed Martin that
“Mrs. Eure and I interpret paragraph #2 of your March 23 letter
4
to require the continuation of coverage of the kind now in
force, or the substantial equivalent.”
Finally, Ellen Vinck (“Vinck”), Director and Vice President
for U.S. Marine Repair, testified as to her interpretation of
the Agreement. Vinck reviewed the Agreement at the time U.S.
Marine Repair terminated the reimbursement plan. She testified
that her “interpretation of the agreement was that Mrs. Eure
should have medical coverage at any time as covered by the
current plan, and she does. [Her coverage] was not canceled.”
Vinck further testified that she believed that “the officers
medical reimbursement plan [was] a perk.” She did not believe
that canceling the reimbursement plan violated the Agreement
because the basic coverage, under Sentara, was not canceled.
In a letter opinion, the trial court recognized that it had
“previously held the [health care benefits] clause to be
ambiguous, but on further consideration,” the trial court did
“not believe it” was ambiguous; therefore, it did not consider
the parol evidence in reaching its decision. The trial court
interpreted the medical benefits provision of the Agreement as
follows:
The clause at issue allows a change in
benefits but it must be under a
“replacement plan which provides to her
coverage substantially equivalent to that
which would be available if Mr. Eure were
living and holding office as President of
Norshipco.” I find that the clause refers
5
to future events, and that it ought to be
construed as if Mr. Eure were the president
of Norshipco at the time the replacement
plan is provided. The term “replacement
plan” in this context necessarily suggests
a possible future event. The phrase “would
be available” when used with “replacement
plan” indicates a possible future
condition. If the intent had been to
require that a replacement plan be
substantially equivalent to present
coverage, a present tense verb, not a
conditional tense, would have been used.
Such an intent could have been stated
“. . . coverage substantially equivalent to
that which she now has.”
Accordingly, the trial court held that Norshipco was not
required to continue to provide Mrs. Eure with the health care
benefits under the company’s former reimbursement plan after the
date that plan was terminated. The trial court further held
that U.S. Marine Repair was not liable for the debts of
Norshipco because there was “insufficient evidence to apply the
alter ego doctrine.” Mrs. Eure subsequently filed a motion to
reconsider, which the trial court overruled. On April 25, 2001,
the trial court entered a decree memorializing its decision.
Mrs. Eure appeals the adverse ruling of the trial court.
On appeal, Mrs. Eure argues that the language in the
Agreement was ambiguous and the trial court should have
considered parol evidence to determine the intent of the
parties. She further argues that the trial court erred in
ruling that Norshipco was not required to provide her with
6
benefits “equivalent” to those provided under the former
reimbursement plan. Finally, she claims that the trial court
erred in dismissing U.S. Marine Repair as a party because
Norshipco has no board of directors and operates under the
direction of the chief operating officer of U.S. Marine Repair.
Norshipco maintains that the Agreement is unambiguous and
the trial court correctly interpreted its plain meaning.
Furthermore, Norshipco asserts that the trial court properly
dismissed U.S. Marine Repair as a party because Mrs. Eure failed
to demonstrate that Norshipco was merely the “alter ego” of the
corporation.
II. Standard of Review
This appeal presents questions of both law and fact. The
question whether the language of a contract is ambiguous is a
question of law which we review de novo. Langman v. Alumni
Ass’n of the Univ. of Va., 247 Va. 491, 498, 442 S.E.2d 669, 674
(1994). Accordingly, on appeal we are not bound by the trial
court’s interpretation of the contract provision at issue;
rather, we have an equal opportunity to consider the words of
the contract within the four corners of the instrument itself.
Wilson v. Holyfield, 227 Va. 184, 187-88, 313 S.E.2d 396, 398
(1984).
The question whether the plaintiff introduced sufficient
evidence to hold a parent company liable for the debts of its
7
subsidiary is a question of fact. Beale v. Kappa Alpha Order,
192 Va. 382, 399, 64 S.E.2d 789, 798 (1951). Accordingly, we
will only reverse the finding of the trial court if it is
plainly wrong or without evidence to support it. W.S. Carnes,
Inc. v. Board of Supervisors, 252 Va. 377, 385, 478 S.E.2d 295,
301 (1996).
III. Analysis
As a preliminary matter, the dissent maintains that
consideration of Mrs. Eure’s argument concerning parol evidence
is barred by application of Rule 5:25. Even Norshipco does not
make this argument.
In Mrs. Eure’s opposition to Norshipco’s motion for summary
judgment she first argued that the language of the Agreement was
unambiguous; however, she further asserted that if the trial
court found the Agreement to be ambiguous, then she should be
permitted to introduce parol evidence to clarify the intent of
the parties. The trial court considered the issue of ambiguity,
twice ruled that the language of the Agreement was ambiguous,
and permitted the introduction of parol evidence at trial before
reversing its prior rulings and finding the language of the
Agreement unambiguous. On appeal, Mrs. Eure maintains that the
language of the Agreement is ambiguous and that the unrefuted
parol evidence introduced at trial supports her interpretation
of the Agreement.
8
The purpose of Rule 5:25 is “to protect the trial court
from appeals based upon undisclosed grounds, to prevent the
setting of traps on appeal, to enable the trial judge to rule
intelligently, and to avoid unnecessary reversals and
mistrials.” Fisher v. Commonwealth, 236 Va. 403, 414, 374
S.E.2d 46, 52 (1988), cert. denied, 490 U.S. 1028 (1989). None
of the aforementioned concerns exists in the present case.
Having ruled on the issue three times, the trial court clearly
had the opportunity “to rule intelligently” on the issue. This
case hardly presents an appeal on undisclosed grounds. Rule
5:25 does not bar Mrs. Eure from asserting before this Court
that the language in the Agreement is ambiguous and that the
trial court should have considered the parol evidence presented
below.
When an agreement is plain and unambiguous on its face, the
Court will not look for meaning beyond the instrument itself.
Ross v. Craw, 231 Va. 206, 212, 343 S.E.2d 312, 316 (1986).
However, when a contract is ambiguous, the Court will look to
parol evidence in order to determine the intent of the parties.
Aetna Cas. and Sur. Co. v. Fireguard Corp., 249 Va. 209, 215,
455 S.E.2d 229, 232 (1995). Contract language is ambiguous when
“it may be understood in more than one way or when it refers to
two or more things at the same time.” Granite State Ins. Co. v.
Bottoms, 243 Va. 228, 234, 415 S.E.2d 131, 134 (1992). However,
9
“[a] contract is not ambiguous merely because the parties
disagree as to the meaning of the terms used.” TM Delmarva
Power, L.L.C. v. NCP of Virginia, L.L.C., 263 Va. 116, 119, 557
S.E.2d 199, 200 (2002).
On appeal, Mrs. Eure maintains that the Agreement “means
that for the remainder of her lifetime, she would receive, at
Norshipco’s expense, the benefits existing at the time of the
execution of the contract, as well as any additional benefits
Norshipco might subsequently add to its coverage.” Norshipco
argues that “the replacement plan contemplated by the Agreement
was one which Mr. Eure would be entitled to if he were living
and holding office as the President of Norshipco at the time of
the contemplated replacement of the plan.”
In order to determine whether the language is ambiguous, we
look at the words at issue within the four corners of the
Agreement itself. Wilson, 227 Va. at 188, 313 S.E.2d at 398.
Upon independent review of the Agreement, we hold that the
Agreement is ambiguous on its face.
The language used in the health care provision can be
interpreted in more than one way. The Agreement provides health
care coverage to Mrs. Eure under the existing plan, “or any
replacement plan which provides to her coverage substantially
equivalent to that which would be available if Mr. Eure were
living and holding office as President of Norshipco.” By its
10
terms, the clause could either mean that any replacement plan
coverage must be equal to the coverage being provided when the
Agreement was signed, or that any replacement plan coverage must
be equal to that which Mr. Eure would receive as President of
Norshipco at the time any replacement plan is instituted.
Accordingly, the clause providing health care benefits is
ambiguous and the trial court erred in failing to consider parol
evidence.
We note that, in the same paragraph, a further ambiguity
appears. Norshipco assumes the responsibility for providing
“reasonable security for the ongoing performance of its
obligations hereunder after the liquidation or dissolution of
Norshipco or any change of control.” The word “hereunder”
modifies “obligations,” but the phrase does not explain to which
obligations it refers. The clause can be interpreted to provide
security for the health care benefits obligation which appears
in the same paragraph, or it can be interpreted to provide
security for the deferred compensation payments which are
included in paragraph 1 of the Agreement, or it can be
interpreted to provide security for both health care benefits
and deferred compensation benefits. If the obligation to
provide security for ongoing performance of obligations is
concerning health care benefits, there is an obvious conflict in
the juxtaposition of language that posits Mr. Eure as President
11
of Norshipco under circumstances where it is contemplated that
Norshipco is liquidated or dissolved. These different
interpretations and inherent conflicts demonstrate ambiguity in
the Agreement.
Having determined that the language in the Agreement is
ambiguous, we will next consider the parol evidence presented at
trial. In response to the question whether Mrs. Eure’s benefits
could be retracted by Norshipco, Carlyle testified that “it was
the intent that Mrs. Eure was to have these benefits for the
rest of her life.” Furthermore, two letters written prior to
the execution of the Agreement indicated that Mrs. Eure was to
receive coverage equal to “the kind . . . in force,” at the time
the Agreement was signed. The only evidence that supported
Norshipco’s interpretation of the Agreement was the testimony of
Vinck. However, Vinck was not a party to the Agreement;
therefore, her testimony consisted solely of her personal
interpretation of the Agreement and did not reveal the intent of
the parties at the time the Agreement was entered. Accordingly,
the parol evidence in favor of Mrs. Eure’s interpretation of the
Agreement was unrefuted at trial.
On this record, we hold that the trial court erred in
finding the language of the Agreement unambiguous and in failing
to consider the parol evidence that was presented. At trial,
both parties had the opportunity to introduce parol evidence.
12
In light of the unrefuted parol evidence in support of Mrs.
Eure’s interpretation of the Agreement, we hold that Norshipco
breached the Agreement when it terminated the reimbursement plan
benefiting Mrs. Eure.
Finally, Mrs. Eure argues that the trial court erred in
dismissing U.S. Marine Repair as a party. She claims that “U.S.
Marine offered no evidence to demonstrate that Norshipco was an
entity independent of U.S. Marine’s control.” Mrs. Eure has
misstated the allocation of the burden of proof on this issue.
In Beale v. Kappa Alpha Order, 192 Va. at 396-97, 64 S.E.2d
at 797, we stated that:
‘Before the corporate entity may be
properly disregarded and the parent
corporation held liable for the acts of
its subsidiary . . . it must be shown not
only that undue domination and control was
exercised by the parent corporation over
the subsidiary, but also that this control
was exercised in such a manner as to
defraud and wrong the complainant, and
that unjust loss or injury will be
suffered by the complainant as the result
of such domination unless the parent
corporation be held liable.’
(Citation omitted). The separate corporate entities of
corporations will be observed by the courts unless a corporation
is shown to be the “adjunct, creature, instrumentality, device,
stooge, or dummy of another corporation.” Id. at 399, 64 S.E.2d
at 798. Generally, courts will observe the separate corporate
entity, even though one corporation “may dominate or control
13
another, or may treat it as a mere department [or]
instrumentality . . . and courts will disregard the separate
legal identities of the corporation only when one is used to
defeat public convenience, justify wrongs, protect fraud or
crime of the other.” Id. (citation omitted). Accordingly, Mrs.
Eure had the burden to provide facts sufficient to demonstrate
that Norshipco was merely the “alter ego” of U.S. Marine Repair
in order for the trial court to disregard the corporate form and
hold U.S. Marine Repair liable for the obligations of Norshipco.
To support her assertion that U.S. Marine Repair controls
Norshipco, Mrs. Eure relies upon the deposition testimony of
Alexander Krekich, a senior officer at U.S. Marine Repair, who
stated that Norshipco does not have a board of directors. Mrs.
Eure also points to an application for a letter of credit for
her benefit, wherein the applicant is listed as “United States
Marine Repair, Inc. for acct of Norfolk Shipbuilding & Drydock
Corporation.” According to Mrs. Eure, if U.S. Marine Repair was
not controlling Norshipco, “there would be no reason for it to
be involved in obtaining the letter of credit” for Mrs. Eure. 2
The evidence presented by Mrs. Eure was not sufficient to
allow the trial court to disregard the corporate form. Mrs.
2
We note that the evidence presented at trial demonstrated
that U.S. Marine Repair is “strictly the holding company” of
Norshipco, its subsidiary. Furthermore, U.S. Marine Repair
never assumed the obligations of Norshipco.
14
Eure failed to present evidence that Norshipco was the “alter
ego” of U.S. Marine Repair; therefore, the trial court did not
err in dismissing U.S. Marine Repair as a party when the
underlying lawsuit concerned an Agreement entered into between
Mrs. Eure and Norshipco.
In its Final Decree, the trial court rendered judgment in
favor of U.S. Marine Repair, which judgment will be affirmed.
The trial court declared that the Agreement does not require
Norshipco to continue to provide benefits to Mrs. Eure under its
former Officers’ Medical Expense Reimbursement Plan, which
declaration shall be reversed and judgment will be entered in
favor of Mrs. Eure. The remaining provisions of the Final
Decree are not before us on appeal and will remain unaffected by
our decision.
Affirmed in part,
reversed in part,
and final judgment.
JUSTICE LACY, with whom JUSTICE KEENAN and JUSTICE KINSER join,
dissenting.
I respectfully dissent from the majority's opinion in this
case on procedural and substantive grounds. The primary issue
raised by Mrs. Eure in this appeal is whether the contract
provision at issue was ambiguous. At trial Mrs. Eure did not
assert that the provision was ambiguous, but asserted the
15
opposite – that the provision was unambiguous. Under well-
established rules, Mrs. Eure is not entitled to consideration of
this issue by this Court. I also conclude that the provision at
issue, on its face and when read in context, is not ambiguous
and that the trial court correctly interpreted and applied the
plain meaning of the provision. For these reasons, I would
affirm the judgment of the trial court.
In her first assignment of error, Mrs. Eure asserts that
the trial court erred by finding that the Agreement was
unambiguous and that it should have considered parol evidence
when determining whether, under the Agreement, Mrs. Eure was
entitled to continue receiving benefits under the former
Officers' Medical Expense Reimbursement Plan. While the parties
clearly disagreed on the interpretation of the Agreement at the
trial court level, Norshipco correctly asserts that at all times
Mrs. Eure contended that the Agreement was unambiguous and at no
point did Mrs. Eure assert before the trial court that the
Agreement was ambiguous.
Mrs. Eure's motion for declaratory judgment states that,
"[t]he language bargained for and contained in [the clause at
issue] makes it clear beyond reasonable dispute that no
diminution of coverage would occur." In her opposition to
Norshipco's motion for summary judgment, Mrs. Eure asserted that
the language of the Agreement clearly supports her position, but
16
that "[t]o the extent this Court rules that the language in the
Agreement is less than clear, Plaintiff is entitled to present
evidence which clarifies the intent of the parties." This is
not an assertion that the provision is ambiguous, but only that,
if the trial court concluded it was ambiguous, the parol
evidence rule should be utilized to allow evidence of intent.
At trial, Mrs. Eure continued to argue that "there is only one
permissible interpretation of the language here."
In its opinion letter, the trial court stated that the
issue was controlled by the last clause of the first sentence in
paragraph two and noted that "[e]ach of you claims the clause is
unambiguous." Finally, even after the trial court rendered its
decision that the Agreement was unambiguous, Mrs. Eure did not
challenge the trial court's characterization of her position as
claiming the clause was unambiguous, but argued in her motion to
reconsider that the trial court failed "to recognize that [the
language at issue] clearly recognizes Mrs. Eure's right." At no
time prior to the submission of her assignments of error in this
Court, did Mrs. Eure argue that the relevant clause was
ambiguous.
The long-standing rule in Virginia is that parties may not
take successive positions in the course of litigation that are
inconsistent with each other or mutually contradictory. Smith
v. Settle, 254 Va. 348, 354, 492 S.E.2d 427, 431 (1997). " 'A
17
[litigant] shall not be allowed to approbate and reprobate at
the same time.' " Leech v. Beasley, 203 Va. 955, 962, 128
S.E.2d 293, 298 (1962). It is also a fundamental rule of this
Court that we will only consider questions which were presented
to the trial court "with reasonable certainty" at the time of
the trial court's ruling. Rule 5:25.
Mrs. Eure's position at trial regarding ambiguity of the
provision at issue and the position she advances here are not
only inconsistent with each other, they are mutually
contradictory. Such approbation and reprobation, along with her
failure to argue at any time before the trial court that the
provision was ambiguous, should be fatal to her ability to argue
before this Court that the relevant clause was ambiguous under
the well-established principles recited above.
I also disagree with the majority's determination that the
language at issue is ambiguous. In 1992, following the death of
Mr. Eure, Norshipco, Norshipco Financial Corporation, and Mrs.
Eure executed an agreement in settlement of a more than $3
million debt owed by Mr. Eure to Norshipco. The settlement
agreement included provisions relating to retirement benefits,
stock assignments, transfers and reissues, and, as relevant
here, health insurance benefits. The provision at issue states:
Mrs. Eure will be afforded health care at
Norshipco's expense throughout her remaining
lifetime, under the existing Norshipco health
18
plan and any future enhancements available to key
executives, or any replacement plan which
provides to her coverage substantially equivalent
to that which would be available if Mr. Eure were
living and holding office as President of
Norshipco.
(emphasis added). The majority concludes, as Mrs. Eure argues
here, that the emphasized clause is ambiguous because it "could
either mean" that a new plan had to be "equal to the coverage
being provided when the Agreement was signed" or that it had to
be "equal to that which Mr. Eure would receive as President of
Norshipco at the time" a new plan was instituted. However,
neither Mrs. Eure nor the majority offers any analysis of the
clause itself that supports the construction advocated by Mrs.
Eure and adopted by the majority.
In her brief, Mrs. Eure contends that the "sense" of the
disputed clause was that if Norshipco "reduced its coverage, she
would be entitled to receive benefits substantially equivalent
to those existing at the time of the execution of the contract."
Further, the disputed clause "[s]pecifically" means that if the
reimbursement plan which was in existence at the time of the
execution of the settlement agreement was terminated, Norshipco
was required to "provide her with equivalent replacement
coverage."
This "sense" of the clause, however, is never explained in
terms of the language contained in the clause. Rather, Mrs.
19
Eure argues that the fallacy of Norshipco's position is not that
Norshipco's interpretation is erroneous, but that "the words on
which they rely refer only to a replacement plan, and there was
none." This argument addresses a factual issue, that is,
whether the substitution of a new health care plan which
eliminated the reimbursement option was or was not a replacement
plan. It does not address the issue of ambiguity, and the
factual issue it raises was resolved by the trial court when
that court determined that the word "plan" as used in this
provision was used "collectively, that is, to mean all of the
health benefits Norshipco provides Mrs. Eure." Mrs. Eure has
not challenged this finding on appeal.
Analysis of the provision as written does not support the
construction advanced by Mrs. Eure in a number of particulars.
Mrs. Eure's construction is based on the theory that the
reference to Mr. Eure being president of Norshipco refers back
to 1992. However, if such reference back is to successfully
support the construction advanced by Mrs. Eure, the clause would
have to be amended to read "or any replacement plan which
provides to her coverage substantially equivalent to that which
would have been available if Mr. Eure were living and holding
office as President of Norshipco in 1992." Ambiguity cannot be
established based on the addition of language not contained in
the writing. See Kennard v. Travelers Protective Ass'n, 157 Va.
20
153, 157, 160 S.E. 38, 39 (1931) ("[c]ourts should not make
uncertain that which is certain, and they cannot make contracts
for the parties").
Furthermore, the first clause of the provision insures that
Mrs. Eure will receive medical care under the plan in effect at
the time of settlement plus any enhancements. If the second
clause means no more than that future benefits must be the same
as those provided in 1992, the second clause would be surplusage
because that requirement was already established in the first
clause.
The construction of the provision clearly reflects the
intent of the parties. The first clause establishes Mrs. Eure's
entitlement to lifetime health care benefits at Norshipco's
expense and measures the level of benefits she is to receive by
those available to a spouse of an officer of Norshipco under the
company's health care plan in existence in 1992 when the
Agreement was signed. The second clause establishes the level
of benefits which Mrs. Eure would be entitled to receive in the
event the company changed its health care plan by using the same
measure as in the first clause, that is, the health care
benefits that a spouse of an officer of Norshipco would receive
under the subsequent company plan. *
*
Mrs. Eure argues that such a construction would allow the
company to defeat her claim to medical coverage entirely by
21
Finally, the majority concludes that ambiguity exists
because other portions of the provision contemplate the
potential dissolution of Norshipco in which case there would no
longer be a "president" of Norshipco. I submit that the
provision in issue is not rendered ambiguous by virtue of other
parts of paragraph two. The provision in issue addresses the
level of medical care benefits to which Mrs. Eure is entitled
under the agreement. The portions of the paragraph cited by the
majority address the requirement that Norshipco provide for
continuation of its performance responsibilities in the event
its corporate existence is terminated or altered. Those
provisions do not address the level of services it must provide.
For these reasons, I would affirm the judgment of the trial
court.
terminating medical coverage to the spouse of the company
president. That factual circumstance is not before the Court
and is not relevant to determining whether language in a
contract is ambiguous.
22