                                                                                                                           Opinions of the United
1996 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


4-11-1996

Sumitomo Machinery v. AlliedSignal Inc
Precedential or Non-Precedential:

Docket 95-5138




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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT


                          N0. 95-5138


         SUMITOMO MACHINERY CORPORATION OF AMERICA, INC.

                                 v.

                       ALLIEDSIGNAL, INC.,

                            Appellant



         On Appeal From the United States District Court
                  For the District of New Jersey
               (D.C. Civil Action No. 91-cv-01790)


                     Argued October 10, 1995

     BEFORE:   STAPLETON, McKEE and NORRIS,* Circuit Judges

                (Opinion Filed    April 11, l996)




                         Mark J. Malone (Argued)
                         Lori D. Linskey
                         Stier, Anderson & Malone
                         1120 Route 22 East
                         Bridgewater, NJ 08807
                           Attorneys for Appellee

                         Douglas S. Eakeley (Argued)
                         Lowenstein, Sandler, Kohl, Fisher &
                          Boylan
                         65 Livingston Avenue
                         Roseland, NJ 07068
                           Attorney for Appellant




* Honorable William A. Norris, United States Circuit Judge for


                                 1
the Ninth Circuit, sitting by designation.




                             2
                         OPINION OF THE COURT




STAPLETON, Circuit Judge:



            In 1991, Sumitomo Machinery Corporation of America

("Sumitomo") and AlliedSignal Inc. ("Allied") settled an

environmental lawsuit concerning property sold to Sumitomo by a

predecessor of Allied.    Their respective responsibilities were

delineated in an Environmental Agreement ("Agreement") which

incorporated a cleanup plan approved by the New Jersey Department

of Environmental Protection ("NJDEP").1   In 1994, NJDEP tightened

the radioactive remediation requirements applicable to the

property, effectively giving Sumitomo the choice of executing a

Declaration of Environmental Restrictions and Grant of Easement

("DER") or remediating to a higher standard than originally

approved.

    A DER attaches to the title of the land and restricts certain

future uses without NJDEP approval.

            Before the district court, Allied argued that the

Agreement unambiguously required Sumitomo to execute the DER, and

Sumitomo argued that it unambiguously did not.    The district

court denied Allied's request for specific performance or

declaratory relief, finding that the Agreement unambiguously

1
  In 1994, the New Jersey Department of Environmental Protection
and Energy ("NJDEPE") shortened its name to New Jersey Department
of Environmental Protection.

                                  3
placed the costs of remediation on Allied and did not require

Sumitomo to enter into the DER.       We find the Agreement ambiguous

and will reverse and remand for further proceedings.



                                  I.

            Between 1937 and 1939, the Bendix Corporation

("Bendix") acquired land in Teterboro, New Jersey.      At various

times since 1939, Bendix used the land for a sewage treatment

facility, a thorium/magnesium alloy foundry, a chemical treatment

facility to dispose of the radioactive waste magnesium, and

storage for various oils and solvents.       In 1977 Bendix subdivided

its land and sold one parcel to Sumitomo.       The current litigation

concerns the environmental cleanup of this parcel of land

("Site").

            By 1988, government investigation had revealed

radioactive contamination on the Site.       In 1984 Bendix had merged

into Allied, and Allied, as successor, took the lead in

formulating a remediation plan for all the land formerly owned by

Bendix.   Meanwhile, Sumitomo moved its operations out-of-state in

1988 and attempted to sell the Site.       To do so, Sumitomo had to

institute a cleanup plan approved by NJDEP.       See Environmental

Cleanup Responsibility Act, N.J. Stat. Ann. §§ 13:1K-6 to 13:1K-

13 (West 1991) ("ECRA"), repealed and replaced by Industrial Site

Recovery Act of 1993, N.J. Stat. Ann. §§ 58:10B-1 to 58:10B-20

(West Supp. 1995) ("ISRA").




                                  2
          Unsatisfied with Allied's efforts, Sumitomo hired Dames

& Moore, an environmental consulting firm, to perform various

environmental tests and to draw up a cleanup plan to submit to

NJDEP.   In January 1991, Dames & Moore submitted an "ECRA

Remedial Investigation and Cleanup Plan" ("Proposed Cleanup

Plan") to NJDEP.    According to the plan, radioactive

contamination would be remediated to 5 pCi/gm for the first

15 cm. of soil, and 15 pCi/gm for any deeper soil ("5/15

standard").2   Dames & Moore estimated that the plan would require

excavating only 300 cubic feet of dirt to remove the "hot spots"

of radiation that pushed the site over the 5/15 standard.

          On August 30, 1991, NJDEP approved the Proposed Cleanup

Plan in a letter ("Plan Approval").   It unconditionally approved

the plan for radiological contamination, and no DER was required.

In contrast, NJDEP required a DER for PCBs:

          2.   PCBs in Soil. . .
          The proposal is acceptable provided that a deed
          restriction be placed on properties where elevated
          levels of contaminants are allowed to remain on-
          site. . . . The deed restriction shall not allow
          contaminated subsurface soil to be brought to the
          surface (0-2') above allowable levels.

App. at 475.   NJDEP similarly required a DER for metals

(chromium):    "Should the metal results be similar to those found

in the earlier samples and the chromium is found to be in the

trivalent form, no remedial action other than a deed restriction

shall be required."   Id.


2
  "pCi/gm" stands for picocuries per gram, a standard of
radiological activity.


                                 3
          A model DER was attached to the Plan Approval.       It

states that by executing a DER, the owner of property "impose[s]

certain restrictions upon the use and occupancy of the Property,

to restrict certain activities at the Property, and . . .

grant[s] an easement to NJDEPE."       See App. at 301; see also

24 N.J. Reg. 401 (proposed regulation N.J. Admin. Code 7:26D,

Appendix A, "Model Document Declaration of Environmental

Restrictions and Grant of Easement").       The owner agrees to avoid

taking actions that may disturb clean soil covering contaminated

land, or that may otherwise cause migration of contaminants.          The

easement allows NJDEP to enter onto the land, inspect its

condition, and do remedial work.       The DER is recorded and runs

with the property until NJDEP executes and records a release.

NJDEP, persons likely to suffer injury, and any citizen of New

Jersey are entitled to enforce the DER.       Future owners are put on

notice by the recordation, and the DER itself requires the owner

to notify any lessees of the DER.

          In April 1991, Sumitomo sued Allied under the

Comprehensive Environmental Response, Compensation, and Liability

Act, 42 U.S.C.A. §§ 9601-9675 (West 1994), to recover response

costs for remediating the site.       In September 1991, a month after

NJDEP approved Sumitomo's plan, the parties settled the suit, and

each parties' responsibilities were laid out in the Agreement.

Overall, the Agreement shifted the responsibility and costs of

cleaning Sumitomo's land onto Allied.       The cleanup was to proceed




                                  4
according to the Proposed Cleanup Plan as modified by the Plan

Approval.

            Allied attempted to go forward with the remediation,

but found that the radiological contamination was more extensive

than Dames & Moore had estimated.    It discovered soil with both

radiological and chemical contamination, "mixed waste," which

requires more extensive treatment.    The parties dispute what

Allied then did, and the propriety of its actions.     What is

undisputed is that tens of thousands of cubic feet of soil were

excavated and stored on site instead of 300.    This soil met the

plan's 5/15 standard and could be placed back on the Site under

the original standard.    The remediation has taken much longer

than the six months estimated by Dames & Moore.

            Due to the delay and extensive excavation of soil,

Sumitomo complained about Allied's remediation to NJDEP. Apprised

of the new circumstances, NJDEP ordered the remediation to halt

and requested an addendum to the Proposed Cleanup Plan. The

parties jointly submitted a proposal which suggested the same

5/15 standard ("Plan Addendum").

            NJDEP approved the Plan Addendum, but under the more

stringent requirements of ISRA, which had been enacted after the

Plan Approval.    The new legislation established two remediation

standards, residential and nonresidential.     See § 58:10B-

12(c)(1).    The residential remediation standard refers to

contaminant levels that do not exceed the health risk level

appropriate for residential use, as determined by the agency. The



                                 5
nonresidential standard refers to a higher risk level appropriate

for uses that are not residential.    If a cleanup plan proposes to

remediate real property to nonresidential standards, ISRA

requires a DER to restrict use of the property to non-residential

uses and other uses compatible with the extent of contamination

and, in addition, restricts any activities that may bring

contaminants above ground.     See § 58:10B-13(a)(2).

          NJDEP determined that the residential remediation

standard for the Site was 3 pCi/gm, based on NJDEP calculations

of safe exposure levels for people.    It rejected the 5/15

standard as creating too high a health risk for unrestricted use.

The approval of the Plan Addendum required the Site to be cleaned

to 3 pCi/gm, covered with one foot of uncontaminated fill, and a

DER executed to insure that the cover remain in place.     Sumitomo

and Allied filed formal objections to the new standard in

accordance with NJDEP's dispute resolution process.     The new

standard would be expensive.    The tens of thousands of cubic feet

of soil stored on the Site could not be placed back onto the land

because its contamination exceeded 3 pCi/gm; it would have to be

shipped for disposal, a costly proposition.     According to Allied,

it might also have to raze a warehouse on the property to treat

the underlying soil.   Exposing the underlying soil would obligate

Allied to remediate other contaminants that were otherwise

acceptable in place and covered by the warehouse.

          Before resolution, Sumitomo withdrew its objection to

the new standard and requested NJDEP to enforce it. Nevertheless,



                                  6
Allied pursued dispute resolution, arguing that the agency had

improperly calculated the correct residential standard and that

the proper standard was the original 5/15 standard. NJDEP

eventually agreed that its standard was too stringent, but did

not agree that the Site could be unrestricted at the 5/15

standard.    In its letter to Allied dated December 1994, NJDEP

stated:
            The NJDEP agrees with your position that the
            radiological criteria for this site should be
            5 pCi/gm above background in the first six
            inches of soil and 15 pCi/gm in any
            subsequent six inch layer for [various
            radiological contaminants]. . . .

            However, the NJDEP does not agree with your
            proposal regarding the issue of unrestricted
            use. Be advised that, in accordance with
            P.L. 1993, c.139, an institutional and/or an
            engineering control, in the form of a
            Declaration of Environmental Restriction,
            will be required if any concentrations will
            remain in the soils greater than 5 pCi/gm.
            This will ensure that any affected soils will
            not be disturbed. "Unrestricted use" will be
            approved when soil concentrations are less
            than 5 pCi/gm throughout the soil column.

App. at 202.    In effect, NJDEP had changed the residential

standard applicable to Allied's cleanup from 3 pCi/gm to

5 pCi/gm, but had not altered ISRA's statutory DER requirement.

Thus, Allied could still remediate to the 5/15 standard in the

Proposed Cleanup Plan and Plan Approval, but Sumitomo would have

to agree to execute a DER.    Alternatively, Allied could remediate

the entire soil column to 5 pCi/gm.

            Despite continued efforts by Allied, NJDEP did not

change its standards any further.    Sumitomo would not execute a



                                 7
DER for the 5/15 standard, so Allied requested the district court

to determine, on an expedited basis, whether Sumitomo must do so

under the Agreement.     By its terms, the Agreement is governed by

the laws of New Jersey, and the parties did not argue otherwise.

After reviewing the parties' briefs and affidavits accompanying

the motion, the district court ruled for Sumitomo, finding that

under New Jersey law, the Agreement unambiguously did not

obligate Sumitomo to enter into the DER, and to the contrary,

placed the burden of regulatory change upon Allied.      This appeal

followed.

            Under 28 U.S.C. § 1291, we have jurisdiction to

entertain an appeal from the final order of the district court.

The original suit was brought under the Comprehensive

Environmental Response, Compensation, and Liability Act, which

vests original and exclusive jurisdiction in federal district

courts.     See 42 U.S.C. § 9613(b) (1994).   In the consent order

filed in conjunction with the settlement, the district court

retained jurisdiction to enforce the Agreement and properly heard

Allied's motion.

            Allied asks us to interpret the Agreement unambiguously

to require the DER, or in the alternative, to find the Agreement

ambiguous and remand for an evidentiary hearing.      We agree with

Allied's alternative argument and hold that the Agreement is

ambiguous as to whether Sumitomo must execute the radiological

DER, and the factual issue of intent must be resolved on remand.




                                  8
                               II.

          When resolving a contract dispute, the initial

determination is whether the contract is ambiguous concerning the

dispute between the parties, an issue of law afforded plenary

review.   See Teamsters Indus. Emp. Welfare Fund v. Rolls-Royce,

989 F.2d 132, 135 (3d Cir. 1993).

          A contract is ambiguous "where the contract is

susceptible of more than one meaning."   Briggs v. United Shoe

Machinery Corp., 92 N.J. Eq. 277, 287, 114 A. 538, 542 (N.J.),

cert. denied, 254 U.S. 653 (1920).   In American Cyanamid Co. v.

Fermenta Animal Health Co., 54 F.3d 177 (3d Cir. 1995), we had

occasion to consider how a New Jersey court would determine

whether there is "more than one meaning":
          [T]he Supreme Court of New Jersey summarized
          this area of the law in the following terms:

                         Evidence of the
               circumstances is always admissible
               in aid of the interpretation of an
               integrated agreement. This is so
               even when the contract on its face
               is free from ambiguity. The
               polestar of construction is the
               intention of the parties to the
               contract as revealed by the
               language used, taken as an
               entirety; and, in the quest for the
               intention, the situation of the
               parties, the attendant
               circumstances, and the objects they
               were thereby striving to attain are
               necessarily to be regarded. . . .

          [Atlantic Northern Airlines, Inc. v.
          Schwimmer, 12 N.J. 293, 301, 96 A.2d 652, 656
          (N.J. 1953).]




                                9
                           It is important for
                 present purposes to note that
                 extrinsic evidence of the
                 negotiations, conduct and other
                 circumstances of the parties is
                 important to a court's analysis of
                 whether an agreement is ambiguous
                 only to the extent, if any, that
                 such evidence provides "objective
                 indicia that, from the linguistic
                 reference point of the parties, the
                 terms of the contract are
                 susceptible of different meanings."
                 Mellon Bank, N.A. v. Aetna Business
                 Credit, Inc., 619 F.2d 1001, 1011
                 (3d Cir. 1980). That is, extrinsic
                 evidence is permitted because the
                 law recognizes that the meaning of
                 words can depend on context, and
                 what may seem unambiguous without
                 context (or in the context that the
                 judge may hypothesize, based on his
                 or her own experience) may be
                 ambiguous when understood from the
                 "linguistic reference point of the
                 parties." Id. See 3 Arthur L.
                 Corbin, Corbin on Contracts § 542
                 (1960). Cf. 4 Samuel Williston &
                 Walter H.E. Jaeger, A Treatise on
                 the Laws of Contracts § 601, at
                 310-11 (3d ed. 1961).


Id. at 181-82.   We now turn to the Agreement to ascertain whether

it is susceptible to more than one meaning.

          The district court found that in the Agreement, Allied

unambiguously agreed to pay "all costs" of the required cleanup:
               1. Assumption of Cleanup Responsibilities.
          Subject to the terms and conditions of this Agreement,
          ALLIED-SIGNAL shall from and after the effective date
          of this Agreement assume full responsibility for:

                 . . . .

                 b) payment of all costs incurred after the
                 effective date of this Agreement relating to or
                 arising from:


                                 10
                         . . . .
                         (3)    the conduct of any work at the
                         Site or compliance with requirements
                         that may be imposed by the NJDEPE or
                         other federal, state or local
                         governmental authorities relating to or
                         arising from such Existing Environmental
                         Conditions, including, but not limited
                         to, the posting of required financial
                         assurances, (the "Work").

App. at 269 (emphasis added).   It also undertook the risk and

cost of more stringent regulations:
               5. Implementation of Cleanup Plan. . . . If new,
          more stringent laws or regulations are enacted which
          require additional work to be performed at the Site
          with respect to such Existing Environmental Conditions,
          ALLIED-SIGNAL shall comply with such laws or
          regulations to the extent required by the NJDEPE. . . .

Id. at 272.
          Allied acknowledges that the preceding Agreement terms

required it to remediate to the extent required by the NJDEP,

including any requirement based on a change of law.   According to

Allied, the ambiguity, if any there be, resides in what

remediation is "required" within the meaning of the Agreement

when the NJDEP gives the landowner an option between (a)

remediating to the standard proposed by the landowner and

accepting a DER limiting future use and (b) remediating to a

substantially higher standard at substantial additional expense.

Allied correctly points out that nothing in the Agreement

expressly speaks to what "required" means in this context.   It

argues, however, that Paragraph 6 of the Agreement unambiguously

reflects an understanding between the parties that "any DER which

the NJDEP [might] impose or require for the Site" as a result of



                                11
their joint proposal would be accepted by Sumitomo, as the

landowner, so that Allied would not be required to perform more

remediation than set forth in that joint proposal.    Paragraph 6

provides:
                 6. Cooperation in Sale or Lease of Site. ALLIED-
            SIGNAL shall cooperate fully with SUMITOMO in the event
            of a sale or lease of all or a portion of the
            Site. . . . SUMITOMO shall provide any such purchaser
            or lessee with a copy of this Agreement and any
            "Declaration of Environmental Restrictions and Grant of
            Easement" ("Deed Restrictions") which the NJDEPE may
            impose or require for the Site. SUMITOMO or any such
            purchaser or lessee shall fully comply with the terms
            of such Deed Restrictions which limit utilization of
            the Site. ALLIED-SIGNAL shall comply with the terms of
            such Deed Restrictions that are applicable to its
            conduct of the Work and shall pay for any portion of
            the Work required by the NJDEPE as part of any "Deed
            Restrictions."


Id. at 273-74 (emphasis added).
            The district court was unpersuaded by Allied's

interpretation of Paragraph 6.    It was important to the court

that Sumitomo had never agreed specifically to a radiological DER

and that NJDEP had approved the original remediation plan without

one.   Paragraph 6 could not be read to obligate Sumitomo to enter

into the radiological DER because NJDEP had not "imposed or

required" it, and the Agreement plainly referred to only DERs

"imposed or required".    As a result of the dispute resolution

process, the radiological DER was one of two alternatives, the

proposed 5/15 remediation standard plus a DER, or remediation to

5 pCi/gm for the entire soil column.

             After considering the alternative interpretations of

the Agreement, we find Paragraph 6 ambiguous concerning


                                  12
Sumitomo's obligations with respect to the radiological DER.

While we agree with the district court that Paragraph 6 can

reasonably be read to impose no relevant obligation on Sumitomo,

we also find it reasonable to interpret the paragraph as

reflecting an understanding that Sumitomo would execute a DER

such as the one at issue here.   The district court erred in its

interpretation of "imposed and required," and should have found

Allied's interpretation also to be a reasonable one.

          It is important at the outset to put Paragraph 6 in the

regulatory context in which it was negotiated.    The regulatory

scheme in place at the time the Agreement was negotiated is, of

course, competent extrinsic evidence concerning the meaning the

parties gave to their descriptions of agency action.

          ISRA gives the owner of contaminated property a choice

between a DER or a more stringent remediation standard.    Property

may be remediated to a standard less stringent than the

residential soil remediation standard if a DER is executed, see

§ 58:10B-13(a), but NJDEP may not impose a DER without the

consent of the owner.   See § 58:10B-12(h)(3).   If the owner does

not consent, he or she is required to remediate to the

residential soil remediation standard.   See § 58:10B-13(b). While

ISRA may properly be viewed as a more "stringent law" within the

meaning of Paragraph 5 of the Agreement, its imposition of a DER

as a condition of utilizing a less strict standard continues the

practice that existed prior to ISRA.




                                 13
           The imposition of a DER is a responsive regulatory

process.   The owner of contaminated land submits a cleanup plan,

and in response to the proposal, NJDEP may impose or require a

DER.   That is what it means to "impose or require" a DER, and the

parties must have understood this meaning at the time of the

Agreement was negotiated and executed.   Dames & Moore submitted

the Proposed Cleanup Plan on behalf of Sumitomo in January of

1991, as required by ECRA.   In August, NJDEP responded with its

Plan Approval, approving the plans for some contaminants

unconditionally, and imposing DERs on the proposed cleanup of

other contaminants.

           NJDEP imposed the radiological DER in the same manner.

Sumitomo proposed the 5/15 standard in the original cleanup plan.

When NJDEP requested the Plan Addendum, Sumitomo, together with

Allied, proposed the 5/15 standard again.   In response, NJDEP

imposed much stricter requirements.   Through dispute resolution

NJDEP relaxed the new requirements, and in the end only imposed a

DER on the 5/15 standard proposed in the Plan Addendum.    The

radiological DER was imposed and required in the responsive

regulatory process typical for a cleanup plan, a process the

parties were aware of when they executed the Agreement.

           Sumitomo would read "imposed or required" as meaning

only DERs absolutely imposed or required, with no choice or

option given.   This interpretation is untenable.   A DER is always

optional in the sense that contaminated land could always be

remediated to such a clean level that no DER could be required.



                                14
In the Plan Approval, NJDEP required a DER for PCBs so long as

"elevated levels of contaminants are allowed to remain on site."

Impliedly, if Sumitomo had proposed to remediate PCBs below

"elevated levels" throughout the Site, NJDEP would not have

imposed a DER.    Where a DER may be required, an owner of land

always has the choice of the DER or remediating to the

residential standard.

          If "imposed or required" were read throughout the

Agreement to exclude any regulations or laws imposed in the form

of alternatives, Allied could not be required to remediate to the

more stringent standard.    Paragraph 1(b)(3) states that Allied

will pay "all costs . . . arising from . . . compliance with

requirements that may be imposed by the NJDEPE," and Paragraph 5

states that Allied will comply with "more stringent laws or

regulations," but only "to the extent required by the NJDEPE."

(emphasis added).    Here, NJDEP required either that a

radiological DER be executed or that the entire soil column be

remediated to the residential standard.    Just as the radiological

DER was not absolutely imposed on Sumitomo, neither was the more

stringent standard absolutely imposed on Allied.     If we followed

Sumitomo's reading of "imposed or required" to its logical

conclusion, DERs would fall outside the scope of the Agreement.

          With this background we return to the key provision of

Paragraph 6:     "SUMITOMO shall provide any such purchaser or

lessee with a copy of this Agreement and any "Declaration of

Environmental Restrictions and Grant of Easement" ("Deed



                                  15
Restriction") which the NJDEPE may impose or require for the

Site."   If Sumitomo has any obligation to execute a radiological

DER, it arises from this provision.

             As the district court found, Paragraph 6 can reasonably

be read to create no obligation on Sumitomo's part to accept a

DER.   The paragraph generally concerns the duties of the parties

in the event of a sale or lease of the Site.     Read in this

context, Sumitomo may have undertaken only the duty to provide a

purchaser or lessee with copies of any DER that happened to be

attached to the land at the time of transfer.     The key provision

in Paragraph 6 refers to a duty to provide a "copy of this

Agreement and any [DER]."     The listing of the Agreement as well

as any DER suggests that the clause creates a duty to provide

copies of certain documents, not a duty to execute those

documents.     Nowhere in Paragraph 6 is it explicitly stated that

Sumitomo has a duty to execute a DER.

             However, it is also entirely reasonable to interpret

Paragraph 6 as creating a duty to execute future DERs.      The

paragraph is entitled "Cooperation in Sale or Lease of Site," but

it is also the place in the Agreement where the parties discuss

their obligations with respect to DERs.     The second half of the

paragraph not only discusses Sumitomo's promise to provide any

DER imposed or required by NJDEP, but it also discusses each of

the parties' obligations to comply with the terms of any such

DER.   Most important, the obligation assumed by Sumitomo in

Paragraph 6 is not stated in terms of "currently existing DERs"



                                  16
or "any DER that Sumitomo may hereafter accept."     Sumitomo

commits itself to deliver "any [DER] which the NJDEPE may impose

or require for the Site."     Given that the only DER that would be

of any concern to a purchaser of the Site would be those that had

been accepted by Sumitomo, it is not unreasonable to suggest that

the obligation to deliver any DER which NJDEP might impose or

require necessarily presupposed that Sumitomo would accept any

DER that NJDEP might propose as a condition of approving its

proposal.



                                 III.

             In connection with their cross motions for summary

judgment, Allied and Sumitomo submitted affidavits of their

representatives during the course of the negotiation of this

Agreement.    In his affidavit, James A. Schutt, Allied's

representative, averred that "the parties specifically discussed

the appropriateness of using clean up standards that took into

consideration the future use of the Site as industrial property

and that a DER [might] be required."     According to Schutt, the

Sumitomo representatives "agreed that industrial standards were

appropriate, [and] that a DER was acceptable."     App. at 211.

Sumitomo's President, William M. Lechler, insisted in this

affidavit, however, that "Sumitomo never committed to entering

into a DER for any kind of contamination."     App. at 512.   The

extrinsic evidence presented by the parties was thus in conflict.




                                  17
          When a contract is ambiguous, the "fact-finder must

attempt to discover what the contracting parties . . . intended

[the disputed provisions] to mean."    Teamsters Indus. Emp.

Welfare Fund, 989 F.2d at 136.   In order to make such a

determination, "objective evidence in support of [the competing]

interpretation[s] should be considered by the fact finder."

Mellon Bank, 619 F.2d at 1011.    When there is a material conflict

in the extrinsic evidence concerning the objective context of the

contract, the trier of fact has no choice but to conduct an

evidentiary hearing and resolve the conflict.    On remand, the

district court will hear all relevant extrinsic evidence the

parties wish to tender, will resolve any conflict in that

evidence, and will make findings of fact with respect to the

intent of the parties.



                                 IV.

            We will reverse the judgment of the district court

and remand for further proceedings consistent with this opinion.




                                 18
