Fourth Department — Contract Interpretation: Stillwater Hydro Partners LP v. Stillwater Hydro Associates LLC

Appellate Division, Fourth Department

Contract Interpretation

Warranty of Suitability

Stillwater Hydro Partners LP v. Stillwater Hydro Associates LLC
CA 12-00915
Appealed from Supreme Court, Cayuga County

Background: The plaintiff appealed from an order denying its motion seeking summary judgment. The parties had entered into an asset purchase agreement for the defendant’s purchase of a hydroelectric plant from the plaintiff. The agreement included an escrow agreement as security for the performance of the asset purchase agreement. The defendant argued that it was entitled to the use of the escrow funds to pay for the cost of replacing a trash rack cleaner that had become inoperable within six months after closing.

Ruling: The Appellant Division reversed and granted judgment in favor of the plaintiff. The court held that a written agreement that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of the terms. According to the plain meaning of the terms of the agreement, the trash rack at issue was excluded from the warranty of suitability.

Elizabeth A. Genung of Melvin & Melvin PLLC for the plaintiff-appellant; Joshua A. Sabo for the defendant-respondent