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In a breach of contract action, the court
deter-mined the meaning of the term “final disposition.”
The parties had an agreement providing for an equal
division of proceeds from any fraud action by Copley
against SKB, commenced “following final disposition,
settlement or resolution” of a pending patent action by
Copley against SKB.
Copley commenced a fraud action against
SKB after obtaining judgment in the patent action but
before resolution of SKB’s appeal. Copley and SKB
subsequently reached a settlement agreement with respect
to both the patent and fraud claims.
On a motion for summary judgment, Rhodes
contended that entry of judgment in the patent action
was “final disposition,” entitling it to a 50% share of
the proceeds of the fraud settlement. Copley argued that
there was no final disposition while SKB’s appeal was
pending, and that Rhodes was entitled to nothing.
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The court first considered whether “final
disposition” was an ambiguous term – i.e., whether “the
phraseology can support reasonable difference of opinion
as to the meaning of the words employed and the
obligations undertaken.” Id. at *3. Judge van
Gestel found no ambiguity. “The phrase ‘final
disposition when referring to a lawsuit means the final
determination of the lawsuit. It is different from the
phrase ‘final judgment.’ … There having been a timely
appeal to the Federal Circuit, the Patent Action
remained until that appeal was resolved.” Id. at *4.
In order to guard against the possibility of judicial
error on this question, the court proceeded to assume
for the sake of assessment that the term was ambiguous
and to supply its own reasonable definition. The court
again concluded that “final disposition” means final
determination, including resolution of any appeals.
Id. at *5. Copley therefore owed nothing to Rhodes
under the terms of the agreement, and was entitled to
summary judgment on the claims against it..
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