Summary of Trident Center v. Connecticut General Life Ins. Co. (1988)
Facts: P borrowed 56.5 million from D for construction of an office building; terms were $56.5 at 12.25% interest for a term of 15 years, and in the case of default in years 1-12, D has the option of accelerating the note and adding 1 10% prepay fee; contract stated that P could not (were not allowed) prepay the principal for the first 12 years; the K was entered into in 1983 when this rate was reasonable; in 1987, this rate compared very unfavorably; P started looking for way of refinancing the loan to take advantage of the lower rates and the D was unwilling to oblige, insisting that loan could not be pre-paid for the first 12 years; P claims that the K language did not accurately reflect the parties intentions, and that they are entitled to prepay the loan immediately, subject to the 10% fee.
P/S: District court dismissed P’s claim and sanctioned P for filling a frivolous lawsuit
Issue: Whether P can introduce extrinsic evidence to determine the parties intention behind the prepay terms.
Holding: The P must be given an opportunity to present extrinsic evidence as to the intention of the parties in drafting the K; REVERSED, for P. REMANDED for further proceedings to allow P to introduce evidence
Rule: If one side is willing to claim that the parties intended one thing but the agreement provides for another, the court must consider extrinsic evidence of possible ambiguity. (Pacific Gas).