Trident Center v. Connecticut General Life Insurance Co.

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Trident Center v. Connecticut General Life Insurance Co.
Court U.S. Court of Appeals, 9th Circuit
Citation 847 F.2d 564 (1988)
Date decided 1988


The plaintiff sought and obtained financing for an office building project from the defendant in a loan for $56,500,000 at 12 ¼ percent interest for a term of 15 years. The terms were comprehensive, and the language seemed clearly stated. The terms provided that “maker shall not have the right to prepay the principal amount hereof in whole or in part” for the first 12 years. The note also provided that in case of default during years 1-12, the defendant had the opportunity of accelerating the note and adding a 10 percent prepayment fee. A few years into the deal, interest rates began to drop and the plaintiff wanted to refinance the loan and pay it off so that they could take advantage of the drop in rates.

Procedural History

The plaintiff sought a declaration that it is entitled to prepay the loan now, subject only to a 10 percent prepayment fee. The defendant moved to dismiss based on the disambiguate terms. Trial court denied parol evidence. Plaintiff appealed and requested to show parol or extrinsic evidence because under California law, even seemingly unambiguous contracts are subject to modification by parol evidence.


Whether plaintiff may present parol or extrinsic evidence when the language of the contract is seemingly unambiguous, and the terms are clearly stated.


Case reversed and remanded for the consideration of external evidence to determine the possible ambiguity of the terms.


The court must follow precedence as stated in Pacific Gas, and because all words are ambiguous, they must consider external evidence as to the intent of the words stated in the contract.