
    [771 NE2d 240, 744 NYS2d 358]
    R/S Associates et al., Appellants, v New York Job Development Authority, Respondent.
    Argued March 21, 2002;
    decided April 30, 2002
    POINTS OF COUNSEL
    
      Law Offices of Sanford F. Young, P.C., New York City (Sanford F. Young and Jan B. Rothman of counsel), Wechsler Harwood Halebian & Feffer LLP (John Halebian and Frederick W. 
      
      Gerkens, III, of counsel), Arthur Fisch and Roy Jacobs for appellants.
    I. The Job Development Authority’s interpretation of the term “effective cost of funds” is contrary to the plain meaning of the term. (Two Guys from Harrison-N.Y. v S.F.R. Realty Assoc., 63 NY2d 396; Sutton v East Riv. Sav. Bank, 55 NY2d 550; Breed v Insurance Co. of N. Am., 46 NY2d 351, 940; Fiore v Fiore, 46 NY2d 971.) II. Notwithstanding its stated obligation and intent to comply with the IRS regulation, the Job Development Authority’s interest computation is inconsistent with that governing regulation. (Ronnen v Ajax Elec. Motor Corp., 88 NY2d 582; Matter of Di Giacomo v City of New York, 46 NY2d 894.) III. The Job Development Authority’s annual reports confirm that its loan losses are treated just like other administrative expenses, all of which are paid out of the l1/2% spread. IV. Neither the Job Development Authority’s self-supporting status, nor its dissatisfaction with the agreement, is a proper basis for construing the contract contrary to the parties’ intent at the time the agreement was executed. (W.W.W. Assoc. v Giancontieri, 77 NY2d 157; Fiore v Fiore, 46 NY2d 971; B & R Children’s Overalls Co. v New York Job Dev. Auth., 257 AD2d 368, 93 NY2d 810; Matter of Wallace v 600 Partners Co., 86 NY2d 543; Collard v Incorporated Vil. of Flower Hill, 52 NY2d 594; John Doris, Inc. v Guggenheim Found., 209 AD2d 380; Shoretz v Shoretz, 186 AD2d 370, 81 NY2d 783.) V. While accepting the Job Development Authority’s claims at face value, the courts below completely disregarded R/S’ proof that “effective cost of funds” does not include loan losses. (Williams Press v State of New York, 37 NY2d 434; W.W.W. Assoc. v Giancontieri, 77 NY2d 157; Putnam Rolling Ladder Co. v Manufacturers Hanover Trust Co., 74 NY2d 340; Matter of Reuters Ltd. v Dow Jones Telerate, 231 AD2d 337; Harza Northeast v Lehrer McGovern Bovis, 255 AD2d 935; Automation Source Corp. v Korea Exch. Bank, 249 AD2d 1; Jacobson v Sassower, 66 NY2d 991.)
    
      Clifford Chance Rogers & Wells LLP, New York City (David A. Schulz and Mark A. Weissman of counsel), for respondent.
    I. Summary judgment was properly granted under settled principles of contract construction (B & R Children’s Overalls Co. v New York Job Dev. Auth., 257 AD2d 368, 93 NY2d 810; Gutter Furs v Jewelers Protection Servs., 79 NY2d 1027; Manhattan & Queens Fuel Corp. v Village of Rockville Ctr., 72 NY2d 824; GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965; Northville Indus. Corp. v Fort Neck Oil Terms. Corp., 64 NY2d 930; Sloame v Madison Sq. Garden Ctr., 43 NY2d 656; Reape v 
      
      New York News, 122 AD2d 29; Greenleaf v Lachman, 216 AD2d 65; Christian, Podleska & Van Musschenbroek v Goldman, Sachs & Co., 203 AD2d 9; De Fren v Russell, 71 AD2d 416.) II. The IRS regulations are not controlling and were not violated. (B & R Children’s Overalls Co. v New York Job Dev. Auth., 257 AD2d 368, 93 NY2d 810; Hudson View II Assoc. v Miller, 174 Misc 2d 278.) III. There is no factual dispute to bar summary judgment as a matter of law. (W.W.W. Assoc. v Giancontieri, 77 NY2d 157; Bensons Plaza v Great Atl. & Pac. Tea Co., 44 NY2d 791; Empire Props. Corp. v Manufacturers Trust Co., 288 NY 242; Westbury Post Ave. Assoc. v Great Atl. & Pac. Tea Co., 46 AD2d 860, 38 NY2d 890; River View Assoc. v Sheraton Corp. of Am., 33 AD2d 187; Browning-Ferris Indus. of N.Y. v County of Monroe, 103 AD2d 1040, 64 NY2d 1046; New York Cent. R.R. Co. v New York, New Haven & Hartford R.R. Co., 24 Misc 2d 414; B & R Children’s Overalls Co. v New York Job Dev. Auth., 257 AD2d 368; Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347; Harza Northeast v Lehrer McGovern Bovis, 255 AD2d 935.)
   OPINION OF THE COURT

Wesley, J.

At issue here is the interpretation of the term “effective cost of funds” in a loan agreement between R/S Associates and the New York Job Development Authority. Because the term is not ambiguous as used in this agreement, we affirm.

The New York Job Development Authority (JDA) is a public benefit corporation created by constitutional amendment in 1961 (L 1961, ch 443, § 2). Its purpose is to “assist, promote, encourage, develop and advance the general prosperity and economic welfare of the people of the state and improve their standard of living” (Public Authorities Law § 1803 [1]). The JDA pursues this goal by providing loans and loan guarantees to help businesses expand or build facilities in New York or acquire equipment for use in this state (see id. § 1803 [2]). Borrowers from the JDA generally do not have access to more traditional funding sources.

Unlike a typical commercial lender, the JDA operates as a conduit funding organization. It finances loans through the sale of either taxable or tax-exempt long-term bonds, guaranteed by the State (see Public Authorities Law § 1813). The JDA is self-supporting; all of its operating and administrative expenses — including any loan defaults — are funded through payments made by borrowers.

R/S Associates, a real estate holding company, and Ittco Sales Co., Inc., a manufacturer and distributor of automotive accessories (together R/S), have common ownership. With Ittco Sales Co. as guarantor, R/S Associates sought and obtained a commercial loan from the JDA to purchase land and construct a facility in Ronkonkoma, New York. In 1986, the JDA approved a $332,500 loan to R/S Associates, which closed two years later. The loan was funded, along with other loans to other borrowers, through the issuance of a variable rate, tax-exempt bond in the principal amount of $24,610,000. The loan agreement provided that “the rate to be charged by the JDA may be revised from time to time but will not exceed one and one half (l1/2%) percent over JDA’s effective cost of funds.”

After making regular payments on the loan for over a decade, R/S filed a putative class action complaint alleging breach of contract and fraud. R/S claimed that the JDA, in its calculation of the “effective cost of funds” under the loan agreement, improperly included the cost of defaults by other borrowers. In its view, that term includes only the interest rate on the bond sold to finance the loan and the direct costs of issuing that bond, such as the cost of bond counsel, underwriters and letters of credit. R/S sought class certification; the JDA cross-moved for summary judgment dismissing the complaint. R/S then countered with its own motion for partial summary judgment on the issue of liability.

Supreme Court dismissed the complaint. The court held that the JDA properly recovers its operating costs through the interest it charges to borrowers, and that the term “effective cost of funds” includes the interest rate on the bond, the cost of issuance and the cost of defaults by other borrowers. The Appellate Division affirmed, noting only that because the term “effective cost of funds” in this agreement is unambiguous “the rules governing the construction of ambiguous contracts were not triggered” (281 AD2d 608, 608). We agree.

We have long adhered to the “sound rule in the construction of contracts, that where the language is clear, unequivocal and unambiguous, the contract is to be interpreted by its own language” (Springsteen v Samson, 32 NY 703, 706 [1865] [citing Rogers v Kneeland, 10 Wend 218 (1833)]). We recently reaffirmed this principle, noting that “ ‘when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms’ ” (Reiss v Financial Performance Corp., 97 NY2d 195, 198 [2001] [quoting W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 (1990)]).

In this loan agreement, the contract term “effective cost of funds” is unambiguous. Under its ordinary usage, the “effective” cost of the funds means the “actual” cost of securing such funds for a specific loan (see e.g. 5 Oxford English Dictionary 80 [2d ed 1989] [defining “effective” as “actual” or “existing in fact”]). Regardless of borrower defaults, the JDA’s funding mechanism required it to repay the underlying bond when due. Thus, the “actual” or “effective” cost of the funds loaned by the JDA necessarily included the interest it had to pay to bondholders, the cost of issuing the bond and the cost of defaults by the borrowers who received loans from bond proceeds. Any other interpretation of this agreement would ignore the import of “effective” in modifying “cost of funds.” The “[l]oss engendered by defaulting borrowers is a readily perceivable risk for any lender, which [the JDA] was entitled to consider in calculating the interest rate charged to [R/S]” (B & R Children’s Overalls Co. v New York Job Dev. Auth., 257 AD2d 368, 369 [1st Dept], lv denied 93 NY2d 810 [1999]).

Because the contract term is unambiguous in this context we need not address R/S’ remaining arguments, based on offers of extrinsic evidence. Unless the court finds ambiguity, the rules governing the interpretation of ambiguous contracts do not come into play (see Matter of Wallace v 600 Partners Co., 86 NY2d 543, 548 [1995]; Breed v Insurance Co. of N Am., 46 NY2d 351, 355 [1978]). Thus, when interpreting an unambiguous contract term “[e]vidence outside the four corners of the document * * * is generally inadmissible to add to or vary the writing” (W.W.W. Assoc., 77 NY2d at 162). “ ‘[Ejxtrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face’ ” (id. at 163 [quoting Intercontinental Planning v Daystrom, Inc., 24 NY2d 372, 379 (1969)]; see Reiss, 97 NY2d at 199).

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges Smith, Levine, Ciparick, Rosenblatt and Graffeo concur.

Order affirmed, with costs.  