Ethyl Corp. vs Forcum-Lannom Assoc.
Ct. of App. Indiana [1982]
Author:- Sam Biers

Relevant Facts: ant/owner Ethyl hired ee/builder to construct an addition onto its Indiana plant.  The parties executed a written agreement.  Builder would “design and build,” a 45,000 sq ft addition for $667,000.  Two mos later the Fire Marshal declared that the plans and specifications did not comply.  The building did not have smoke and heat vents among other things.  The contract was silent as to vents and annunciator board.  The scope of work section obligated builder to install ordinary wet sprinkler fire protection system.  That section also declared that the Contractor was responsible for conformity with applicable codes, rules, regs and standards.

Legal Issue(s): Whether the contract required the builder to construct the building addition in compliance with state building code regulations?

Court’s Holding: Yes

Procedure: Bench trial in favor of builder PL, Forcum.  Df/owner appealed, Reversed and remanded.

Law or Rule(s): In construing written instruments, the express language found w/i the four corners, if unambiguous, determines the intent of the parties such that parol or extrinsic evidence is inadmissible to expand, vary, or explain the instrument UNLESS there has been a showing of fraud, ambiguity, illegality, duress, or undue influence.

Court Rationale: The agreement stated that the “Contractor shall provide all required engineering, labor, etc to design and construct a building addition, equipment foundations, and utility facilities” at the owner’s plant.  Significant language provided that the builder “shall be in conformance with all current and applicable codes, rules, regulations, and standards.”  Moreover the “General Conditions,” expressly declare “Contractor shall give all notices, comply with all laws, ordinances, rules and regulations bearing on the Work.” The plain meaning of the contract called for the builder to design and construct the addition within those terms.  The contract is unambiguous and it would be erroneous to apply rules of construction or to consider extrinsic evidence as there were no allegations or evidence of a defect in the formation.

Plaintiff’s Argument: The language of the contract is clear that it is the builder’s responsibility to conform the building of the addition to all laws, ordinances, and regulations.

Defendant’s Argument: (ee/builder) The language found in the contract is ambigous when taken as a whole.  The sq footage issue, Scope of Work, and General Conditions are vague when it specifically concerns the vents and annunciator.

*NOTE - Admissibility of Evidence of Surrounding Circumstances and Evidence of Intent.