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Extrinsic Evidence Relevant to Interpretation of Ambiguous Term in Commercial Lease

In B&C Management Vermont, Inc., v. John, et al., 2015 VT 61 (April 10, 2015), the Vermont Supreme Court affirmed an order granting summary judgment in favor of the landlords on the parties’ dispute concerning a rental-increase provision of the lease.

Issue: Tenant challenged the landlord’s calculation of rent owed under a commercial lease.

Holding: The trial court properly considered extrinsic evidence of the parties’ intent regarding an ambiguous provision for computing rental increases. Specifically, the court properly considered the parties’ course of conduct in performing under the contract for many years. Thus, the Vermont Supreme Court affirmed the trial court’s decision.

Concurrence: Dooley, J., concurred on the basis that the landlords’ position regarding contract interpretation was the better option than either the tenant’s position or the parties’ course of conduct, but it was not before the court on a technicality (it was not raised in a cross-appeal), so the court was constrained in its options. Robinson, J., also concurred, on the basis that the contract was not ambiguous, but that tenant’s appeal failed, so the only option was to affirm the trial court’s decision.

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