§ 5.1. The Roles of Judge and Jury

written contract unless the resolution depends on disputed parol evidence.8 Parol evidence may be disputed in two ways, as the Restatement (Second) of Contracts [Restatement (Second)] indicates:

A question of interpretation of an integrated agreement is to be determined by the trier of fact if it depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence. Otherwise, a question of interpretation of an integrated agreement is to be determined as a question of law.9

This passage means, in effect, that the resolution of ambiguity is presumptively a question of fact only when a party offers credible extrinsic evidence and it is disputed reasonably.10 A judge should resolve an ambiguity as a matter of law in at least five situations in which the presumption may be overcome. First, neither party offers relevant extrinsic evidence. Second, one party offers relevant extrinsic evidence, and a reasonable jury could credit it. Third, both parties offer extrinsic evidence, but a reasonable jury could credit only one party’s evidence. Fourth, both parties offer relevant extrinsic evidence, but there is no conflict in the evidence. Fifth, both parties offer credible extrinsic evidence, but a jury could draw only one reasonable inference from it as to the contract’s meaning. At least in these five situations, moreover, an appellate court will review a trial court’s decision de novo.11 A number of jurisdictions, in addition, allocate even more decision-making authority to the court by requiring a judge to draw any needed inferences from extrinsic evidence.12 And, in a few jurisdictions, any ambiguity whatever must be resolved against the drafter, leaving no role for the jury at all.13

8E.g., Smith v. Prudential Property and Cas. Ins. Co., 10 S.W.3d 846, 850–51 (Ark. 2000); Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1271 (3d Cir. 1979). See generally JOSEPH M. PERILLO, CALAMARI AND PERILLO ON CONTRACTS § 3.15 (5th ed. 2003). But see Gillmor v. Macey, 121 P.3d 57, 71 (Utah App. 2005 (resolution of ambi-

guity a question for the court, with deference to the finder of fact).

9RESTATEMENT (SECOND) OF CONTRACTS § 212(2) (1981). See, e.g., McCollough v. Regions Bank, 905 So.2d 405, 411 (Ala. 2006); State of New York, 486 N.E.2d at 829;

Parsons v. Bristol Development Co., 402 P.2d 839, 842–43 (Cal. 1965).

10Nadherny v. Roseland Property Company, Inc., 390 F.3d 44, 49 (1st Cir. 2004); Compagnie Financiere de CIC et de L’ Union Europeenne v. Merrill, Lynch, Inc., 232 F.3d 153, 160 (2d Cir. 2000).

11Parsons, 402 P.2d at 842–43.

12ASP Properties Group v. Fard, Inc., 32 Cal.Rptr. 3d 343, 349 (Cal.App. 2005); see Klebe v. Mitre Group Health Care Plan, 894 F.Supp. 898, 905–06 (D.Md. 1995).

13See § 5.1.

A number of courts, however, hold that resolving an ambiguity normally presents a question of fact for the jury.14 Such a statement differs from the approach of the Restatement (Second) in that the jury’s role is not limited to finding extrinsic facts and drawing inferences from those facts: The jury also resolves ambiguities appearing within the four corners of the document. This statement, too, should not be understood to mean that a jury always resolves ambiguities.15 At the least, the court should apply the canons of construction to the whole document before deciding whether a relevant ambiguity remains.16 It is unrealistic and unreasonable to ask a jury to parse a complicated document and apply the canons, which are guides to interpretation rather than factual considerations. In any event, the normal procedural rules can turn questions of fact into questions of law, as when it is appropriate to dismiss a case on the pleadings, to grant summary judgment on the issue, or to grant a directed verdict or a judgment NOV.17

The law may be different in the insurance context. Some courts hold that the task of resolving an ambiguity in an insurance policy is entirely for the court.18 This may be because these jurisdictions have a default rule requiring the court to decide in favor of the insured, making it unnecessary to resolve the ambiguity interpretively.19 In such a case, there is no question of meaning or intent, nor are findings of fact based on extrinsic evidence needed. The rule for resolving ambiguities in favor of the insured is a default rule; it is not aimed at discerning the meaning of the parties’agreement.20 There are other situations in which a court will resolve an ambiguity because there will be no jury, as when a party waives a jury trial and in suits in equity.

The rules allocating decision-making authority to judges and juries do not determine which kinds of extrinsic evidence will move a case to the jury. “Extrinsic evidence” is an ambiguous concept. Yet such a

14See, e.g., Insurance Adjustment Bureau, Inc. v. Allstate Ins. Co., 905 A.2d 462, 481 (Pa. 2006); Bourne v. Walt Disney Co., 68 F.3d 621, 628–31 (2d Cir. 1995); Millwood Mouldings, Inc. v. Wilson, 338 S.E.2d 60, 61 (Ga.App. 1985).

15Bristol-Myers Squibb Co. v. Ikon Office Solutions, Inc., 295 F.3d 680, 684 (7th Cir. 2002).

16Extermitech, Inc. v. Glasscock, Inc., 951 So.2d 689, 694 (Ala. 2006).

17Compagnie Financiere de CIC, 232 F.3d at 159.

18E.g., State Farm Mut. Auto. Ins. Co. v. Villicana, 692 N.E.2d 1196, 1199 (Ill. 1998); Honeymead Prods. Co. v. Aetna Cas. & Sur. Co., 146 N.W.2d 522, 529 (Minn. 1966). But see Hartford Acc. & Indem. Co. v. Weslowski, 305 N.E.2d 907, 909 (N.Y. 1973) (adopting Restatement (Second) rule for all contracts).

19Sawyer v. Farm Bureau Mut. Ins. Co., 619 N.W.2d 644, 648 (S.D. 2000).

20See § 5.4.1.