Cherry, Bekaert & Holland v. Worsham

Annotate this Case

344 S.E.2d 97 (1986)

CHERRY, BEKAERT & HOLLAND, a general partnership v. James Davis WORSHAM.

No. 8526SC1067.

Court of Appeals of North Carolina.

June 3, 1986.

*99 Parker, Poe, Thompson, Bernstein, Gage and Preston by Irvin W. Hankins, III, Gaston H. Gage, and Stephen R. Hunting, Charlotte, for plaintiff-appellant.

Wyatt, Early, Harris, Wheeler and Hauser by William E. Wheeler, High Point, for defendant-appellee.

PARKER, Judge.

We note at the outset that appellee's purported assignments of error are not properly before this Court. Appellee attempts to raise the questions as cross-assignments of error. However, as stated in Rule 10(d), N.C.Rules App.Proc., cross-assignments of error are reserved for asserting errors "which deprived the appellee of an alternative basis in law for supporting the judgment ..." (emphasis added). In order to bring the questions presented before this Court, appellee was required to file a cross-appeal as an appellant, complying with all of the Rules of Appellate Procedure, including deadlines, applicable to appellants. Therefore, the only questions before us are those raised by appellant.

Appellant argues that the court erred in denying its motion for summary judgment and, alternatively, that summary judgment should not have been granted for appellee because there was a genuine issue of material fact concerning the intent of the parties as to the meaning of the word "herein" in the clause in the partnership agreement covering disability of a partner.

The partnership agreement is divided into articles. Article XI deals with disability and Article XII with retirement. Article XI, entitled "DISABILITY", begins by outlining the benefits that a disabled partner would receive from the partnership. After describing the benefits, the last sentence of the first paragraph reads:

If a disability policy is available to the Partners on a group basis through the Partnership, and, whether or not the disabled Partner is covered under said policy, and whether or not the Partnership pays the premiums for said policy, the benefits provided herein shall be reduced by the amount of the insurance benefits provided by said policy. (Emphasis added).

Appellee is receiving disability insurance benefits from a policy "available to the Partners on a group basis through the partnership." He is also receiving his retirement benefits, as provided for in Article XII of the partnership agreement. He is not receiving any disability benefits from the partnership.

The controversy centers around the meaning of the word "herein." Appellant contends the word refers to the entire agreement, meaning that any benefits provided by any article of the partnership agreement would be reduced by disability insurance benefits received. Appellee argues that "herein" refers only to the benefits provided in that particular article providing disability benefits.

We agree with appellee. When read in the context of the article on disability, the word "herein" is clearly limited in its application to disability benefits. The disability benefits provided for in Article XI are intended to provide income for a partner who *100 is temporarily disabled and planning to return to work for the partnership. The partner receives his full pay for the period of disability, up to six months. The partnership is then given the option of electing to retire a partner who remains disabled for more than six months, and a partner who remains disabled for two years is automatically retired. Because the disability benefits provide temporary, emergency income, which can be very expensive to the firm, it is logical for the partnership to desire to offset the burden of providing such benefits by insurance received by the partner.

Retirement benefits, on the other hand, are not emergency provisions. The assumption is that a partner in the firm will remain there until retirement. Benefits can be carefully planned so that financial security can be provided to a retired partner while not presenting the partnership with an undue financial burden. Such careful planning is not possible with disability benefits. The need for the partnership to offset the expense of retirement benefits is not present as it is with disability benefits. Each party entered into the partnership agreement expecting that the new partner would be there until retirement and, upon retirement, would draw a predetermined amount from the partnership. In order to protect the expectations of the parties, the word "herein" must be interpreted to apply only to the benefits provided by Article XI on disability.

Appellant also contends that summary judgment for appellee was improper because a genuine issue of material fact existed concerning the intent of the parties as to the meaning of the word "herein." However, where a contract is unambiguous, its construction is a matter of law for the court to determine. Bicycle Transit Authority, Inc. v. Bell, 314 N.C. 219, 333 S.E.2d 299 (1985). The intent of the parties is to be determined from the plain language of the contract, its purposes and subject matter. Adder v. Holman and Moody, Inc., 288 N.C. 484, 219 S.E.2d 190 (1975). We have already determined that the plain language of the contract supports the interpretation of the contract argued by appellee. The court cannot under the guise of interpretation rewrite the contract for the parties.

From an analysis of the language of the contract, its purposes and subject matter, the trial court properly determined that there was no genuine issue of material fact and that appellee was entitled to judgment as a matter of law. The judgment below is


WEBB and EAGLES, JJ., concur.