Parol Evidence

Matthius v Platinum Estates, Inc., 2010 NY Slip Op 04965 (App. Div., 2nd, 2010)

JAC's contention that it was not obligated to indemnify Grymes Hill,
Cullota, Ricca, and Platinum because pursuant to the merger clause in
the January 17th agreement, that agreement superseded the prior
indemnification agreement, is without merit. The purpose of a merger
clause is to require full application of the parol evidence rule in
order to bar the introduction of extrinsic evidence to alter, vary, or
contradict the terms of a written agreement (see Jarecki v Shung Moo
Louie,
95 NY2d 665, 669; Matter of Primex Intl. Corp. v Wal-Mart
Stores,
89 NY2d 594, 599). Where a valid contract is incomplete,
extrinsic evidence is admissible to complete the writing if it is
apparent from an inspection of the writing that all the particulars of
the agreement are not present, and that evidence does not vary or
contradict the writing
(see Valente v Allen Shuman & Irwin Richt,
D.P.M., P.C.,
137 AD2d 678).

Here, the January 17th agreement was incomplete and ambiguous. It
contained a general provision requiring JAC to provide insurance, but
did not state the amount of insurance coverage or the parties to be
named as insureds. Therefore, evidence of the indemnification agreement,
which contained specific provisions regarding the amount of insurance
to be provided and the parties to be insured, was admissible to resolve
these ambiguities. The indemnification agreement however, did not vary,
alter, or contradict any terms in the January 17th agreement and, thus,
remained enforceable (see Matter of Primex Intl. Corp. v Wal-Mart
Stores,
89 NY2d 594).

Furthermore, the January 17th agreement set forth the work to be
performed by JAC, but did not specifically address the issue of
indemnification. Therefore, Grymes Hill and Platinum could present
evidence to prove the existence of the agreement in which JAC agreed to
indemnify them (see Elbroji v 22 E. 54th St. Rest. Corp., 67 AD3d
957
). Since the indemnification agreement and the January 17th
agreement dealt with different subject matter, the merger clause did not
extinguish the indemnification agreement (see Gordon v Patchogue
Surgical Co.,
222 AD2d 651).

By obtaining insurance and naming Grymes Hill as an insured
pursuant to the indemnification agreement, JAC demonstrated its intent
to be held to that agreement.

The bold is mine.

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