Wednesday, December 4, 2013

Trident Center v. Connecticut General Life Insurance Co. case brief

Trident Center v. Connecticut General Life Ins. Co. case brief summary
847 F.2d 564 (1988)

Plaintiff appealed a decision from the United States District Court for the Central District of California that dismissed plaintiff's complaint and, sua sponte, sanctioned plaintiff for the filing of a frivolous lawsuit.

Plaintiff contended that the language of a contract was ambiguous and, thus, that plaintiff had an option of prepaying a loan if only it was willing to incur the prepayment fee. Plaintiff also argued that under California law, even seemingly unambiguous contracts were subject to modification by parol or extrinsic evidence. Thus, argued plaintiff, the lower court should have granted it an opportunity to prove that the contract language did not accurately reflect the parties' intentions.


  • The court rejected the argument that the contract was ambiguous. 
  • The proffered interpretation would have resulted in a contradiction between two clauses of the contract; the default clause would have swallowed the clause prohibiting plaintiff from prepaying. 
  • Whether to accelerate repayment of the loan in the event of default was entirely defendant's decision. 
  • However, under California law, extrinsic evidence was admissible.

The court reversed the judgment below and remanded the case for reinstatement of the complaint on the grounds that California did not follow the traditional rule that barred extrinsic evidence in the case of unambiguous integrated contracts. The court also reversed the award of sanctions.

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