Litigation For the Yacht Club Set
In an opinion issued today, the New York Appellate Division for the First Judicial Department resolved an issue regarding the appropriate Challenger of Record for the coming America’s Cup race. The court found in favor of the Golden Gate Yacht Club (“GGYC”) and against a Swiss entry(“SNG”). The legal issue turned on the phrase “having for its annual regatta” in the Deed of Gift for the race. The full governing language:
“Any organized Yacht Club of a foreign country,incorporated, patented, or licensed by the legislature, admiralty, orother executive department, having for its annual regatta an oceanwater course on the sea, or on an arm of the sea, or one which combinesboth, shall always be entitled to the right of sailing a match of thisCup, with a yacht or vessel propelled by sails only and constructed inthe country to which the Challenging Club belongs, against any oneyacht or vessel constructed in the country of the Club holding the Cup.”
The court’s majority gives us a grammar lesson:
This appeal turns on the meaning of the words “having for its annualregatta” as used in the Deed of Gift. In making its determination, themotion court found that the phrase is “plainly understood to mean thatit is an on-going activity; the activity has taken place and iscontinuing.” The court further found that the phrase “implies that theorganization has had one or more regattas in the past, and willcontinue to have them in the future.” Accordingly, the court reasonedthat CNEV was not a qualified Challenger of Record because it had notheld an annual regatta as of the date of its challenge. The Deed ofGift, a trust instrument, “is to be construed as written and thesettlor’s intention determined solely from the unambiguous language ofthe instrument itself” (Mercury Bay Boating Club, 76 NY2d at267). As SNG would have it, the annual regatta requirement can besatisfied where the yacht club “intends to hold an annual regattaand does so prior to the date of its proposed match.” GGYC disputesSNG’s construction, arguing that ” [h]aving’ as commonly used in thelaw does not mean not having now.’ It means possess.’ And, in thiscontext, it means, possess’ an annual regatta.” GGYC’s argument isuntenable because, as a matter of standard English usage, the noun”regatta” cannot be the proper object of the verb “possess.”
The record includes an excerpt from An English Grammar For the Use of High School Academy, and College Classes, byW. M. Baskervill and J. W. Sewell [1896]. According to this treatise,participles, such as “having,” “express action in a general way,without limiting the action to any time, or asserting it of anysubject.” Participles “cannot be divided into tenses (present, past,etc.), because they have no tense of their own, but derive their tensefrom the verb on which they depend.” An example given in the treatiseis “fulfilling,” which depends on the past-tense verb, “walked,” in thefollowing: “He walked conscientiously through the services of the day,fulfilling every section the minutest, etc.” A further example is”dancing,” which depends on a present-tense verb in the followingverse:
“Now the bright morning star, day’s harbinger,
Comes dancing from the East.”
Inaccordance with the foregoing, “having for its annual regatta” can onlybe interpreted through strained English usage. If explicable at all,the phrase is subject to conflicting interpretations. We therefore holdthat the Deed of Gift’s annual regatta requirement is ambiguous. GGYCargued below that the participle, “having,” in the Deed, derives itstense from the words “shall always be entitled.” “Shall,” however, is aword used to form the future tense (Lutz and Stevenson, The Writer’sDigest Grammar Desk Reference § 1C, at 16-17). Accordingly, GGYC’sargument only confirms the ambiguity of the annual regatta requirement.
A court may resort to extrinsic evidence to construe an ambiguous provision of a trust instrument (see Mercury Bay Boating Club, 76NY2d at 267). In this instance, the Cup’s recent history is a source ofrelevant extrinsic evidence. SNG challenged for the 31st America’s Cupby letter to the Royal New Zealand Yacht Squadron (RNZYS), the thentrustee, on August 18, 2000. SNG, a Swiss yacht club, is situated onLake Geneva and, as of the date of its challenge, had never held aregatta on an ocean water course, as required by the Deed…
A dissent would find against the Swiss yacht club:
I am also in agreement with the motion court that GGYC’s Notice ofChallenge is in compliance with, and therefore valid under, theprovisions of the Deed. In Mercury Bay, the Court of Appealsnoted that the Deed “broadly defines the vessels eligible to compete inthe match” (76 NY2d at 266), and “permits the competitors to bothconstruct and race the fastest vessels possible so long as they fallwithin the broad criteria of the deed… [which document makes it]clear that the design and construction of the yachts as well as theraces, are part of the competition contemplated” (id. at 269).
Here, GGYC’s notice and certificate contain all the informationrequired by the Deed, although SNG takes issue with GGYC’s descriptionof the challenging vessel in the certificate as a “keel yacht” whilespecifying dimensions suggestive of a multi-hulled vessel, such as acatamaran, thereby creating an ambiguity and rendering the challengeinvalid. It is clear, however, that even if the certificate contained apossible ambiguity, SNG was not at any time actually confused or misledby the Certificate, as the record indicates that SNG fully understoodthat GGYC was going to race a catamaran. The general counsel of SNG’srepresentative racing team, in an affidavit submitted in support ofSNG’s motion for summary judgment, averred that the dimensionsdelineated in the certificate “can only be for a multi-hulled vessel -presumably a catamaran,” while not referring to any confusing orinconsistent language onthat point. Moreover, SNG’s protestations of confusion are beliedby its own reply brief in which SNG acknowledges that GGYC has proposedto compete with a “catamaran goliath.”
(Mike Frisch)